Buying & selling · Valuation
Laundromat Valuation: Gross Revenue and SDE (Part 2)
How to get from a seller’s gross revenue claim to a defensible SDE figure, and which add-backs a buyer should and should not accept.
- ●Laundromat valuation runs on SDE, seller’s discretionary earnings, not on the net income figure a tax return shows.
- ●Verify gross revenue against something independent. Machine start reporting, card system totals and bank deposits all leave a trail a seller’s spreadsheet does not.
- ●An owner’s salary is a legitimate add-back only if the buyer will genuinely pay themselves the same way; otherwise it is not discretionary.
- ●Non-operating income does not belong in SDE. Interest on cash reserves, or a one-time sale of old washers and dryers, is not earnings from running a laundromat.
- ●The practical lesson: make the seller show you where every dollar came from, then rebuild SDE yourself rather than accepting theirs.
Part one of this laundromat valuation series covered the assets and the lease. This one covers the earnings: how to verify gross revenue instead of taking a seller’s word for it, what SDE actually includes, which add-backs are legitimate and which are a seller quietly inflating the number, and why non-operating income does not belong in the calculation at all.
This article is based on an episode
Laundromat Valuation: Gross Revenue and SDE
Laundromat Ownership · Episode 17
Part 1 of this series covered the two foundations of any laundromat valuation: the asset sale and the lease. This edition moves to the earnings side. When you compare two laundromats, the first number you’ll see is the biggest — gross revenue — and the second is seller discretionary earnings (SDE). SDE is the most important number in buying or selling a laundromat, and most owners are already using it even when they call it something else.
This is Part 2 of the printed series in Full Cycle Magazine from the CLA. The magazine issue goes deeper than this article does, so it’s still worth having on your shelf, but what follows will give you a working command of both numbers and stop you from getting caught off guard in a negotiation.
Gross Revenue: The Fastest Way to Size Up a Laundromat
Gross revenue is an easy number to understand and a genuinely useful one. It’s every single dollar of top-line revenue that comes into the laundromat. You can pull that figure straight from a clean set of books or from your point-of-sale laundromat reporting, which is where Ian starts when he’s getting a rough read on what a store might be worth.
The reason gross revenue is useful is that laundromats typically sell somewhere between one and two times a year’s gross revenue. That range is wide, but it gives you a starting bracket the moment you know the top-line number — before you’ve seen a single expense line.
🔑 Insider Key
If you know nothing about a laundromat except its gross revenue, you still have a defensible starting point for what it might be worth. Just never stop there.
The 50 to 70 Week Rule
There’s a rule of thumb worth keeping in your head. Ian came across it in an older Eastern Funding blog post and has found it to hold up: lenders will often finance you for roughly 50 to 70 weeks of a laundromat’s revenue. That’s frequently where the valuation conversation starts.
In Ian’s estimate, something like 90-plus percent of laundromats in the US will land in that 50 to 70 week band as a fair-market valuation. When Liberty Laundry bought its stores back in 2023, they purchased the operational part of the business — not the real estate at first — for slightly more than 1x revenue, and they added real estate on two of the three properties, which justifies a premium because it gives you more long-term security. Even though they never used the week-count rule to set that price, the deal still fell inside the 50 to 70 week range.
🔑 Insider Key
Buying the real estate alongside the business justifies paying a slightly higher multiple on the operation itself, because the long-term security is worth more.
What Gross Revenue Hides
Here’s the hard line: do not make an offer based on gross revenue alone. It tells you what comes in, but nothing about what goes out. Once you look under the hood, you might find an enormous payroll, heavy rent from a bad lease, low prices paired with sky-high utilities, or steep repair costs on aging equipment that you can track in your machine repair history. Any one of those can make an otherwise healthy top line essentially worthless.
There’s also the question of whether the reported revenue is real. Before you trust a seller’s gross number, confirm it reflects money that was actually banked — strong employee theft prevention and detailed reporting close the gap between what was rung up at the counter and what hit the account. Gross revenue gets you started. It does not get you to an offer.
SDE: Why Seller Discretionary Earnings Is the Number That Matters
If gross revenue is all the revenue, seller discretionary earnings (SDE) is a reduced slice of it — and it’s the number you actually buy on. Seller discretionary earnings is a laundromat’s total pre-tax profit with the owner’s salary and the owner’s discretionary, non-essential, and one-time expenses added back, representing the full amount of cash a single owner-operator can expect to take out of the business.
Most brokers use it. The SBA recommends SDE as the primary valuation metric for small businesses doing under $5 million in gross revenue annually, and that’s what they’ll lend against. Even owners who’ve never heard the term are usually using it — they just call it the wrong thing.
Ian saw a clear example of this on a revenue sheet a prospective buyer was handed for a laundromat structured as an LLC filing as an S-Corp — the same structure Liberty Laundry uses. (If you want the reasoning behind why that’s the most tax-advantaged setup for a laundromat clearing six figures in profit, there’s a full episode on business entities linked in the show notes.) The sheet was labeled “adjusted EBITDA.” But adjusted EBITDA just means pulling one-time expenses in and out. What this owner was actually adjusting toward was SDE — they’d added the owner’s salary back in without knowing that’s the line that turns EBITDA into seller discretionary earnings.
🔑 Insider Key
When a seller hands you “adjusted EBITDA” with the owner’s salary already added back, you’re almost always looking at SDE wearing the wrong label. Know which number you’re holding.
The S-Corp Salary: The Biggest SDE Add-Back
When a profitable laundromat is structured as an LLC filing as an S-Corp, the owner is required to pay themselves a salary as an employee of the company. So when you buy that business, you’re getting two things: the distributions (the net profits you’ll claim and pay tax on) and that owner’s salary, which the seller was also paying tax on.
To calculate seller discretionary earnings, you add that salary back in, because as the new owner you’ll either pay yourself the same salary if you keep the S-Corp election, or roll it straight into your distributions if you run as a plain LLC. Either way, it’s money available to you. By definition, the owner’s salary has to go into SDE — if you’re not adding it back, you’re not calculating SDE at all. It’s also the single biggest difference between SDE and EBITDA in a laundromat.
What Goes Into Seller Discretionary Earnings
The whole exercise comes down to two questions: what do you add back into earnings, and what do you strip out? These are the items that move from the expense bucket into the SDE bucket — the bucket you pay a multiple on. Each one makes seller discretionary earnings bigger:
- The owner’s S-Corp salary. The biggest one by far. By definition it goes into SDE.
- Unnecessary vehicles. Daily drivers the owner runs through the business. They might buy a few supplies with them, but you won’t keep them on the balance sheet or carry the ongoing expense, so the vehicle costs get added back.
- Trade show and conference travel. The Clean Show, the Excellence in Laundry conference, the Laundromat Millionaire conference — flights, food, and the five-star hotel can run thousands of dollars. That was the seller’s discretionary spending, and it’ll be yours to choose, so it moves into SDE.
- Redundant family payroll. Family members on the payroll whose role disappears or becomes redundant once you take over — if the store wouldn’t be any worse off without them, that payroll gets added back.
- Lifestyle extras. The little personal indulgences that show up on the expense sheet. When Liberty Laundry bought its stores, the previous owner had a stack of music and lifestyle magazine subscriptions — technically for customers, but also exactly what he liked to read. Liberty kept the free coffee and dropped the magazines, so those subscriptions moved into SDE.
What Stays Out of SDE (Including Interest Income)
Just as important is what you do not fold into seller discretionary earnings. These items don’t belong in the earnings multiple you’re buying:
- Non-operating interest income. If the owner keeps cash in an investment account and it throws off interest, that’s non-operational revenue — it’s generated from a non-operating part of the business, not from running the laundromat. You’re probably not buying that cash and you wouldn’t hold the same investments, so it doesn’t belong in SDE.
- One-time equipment sales. If they recently replaced machines and sold the old washers and dryers, that’s a one-time revenue bump. It won’t repeat, so it stays out of the multiple.
- Cash windfalls and grants. One-time grants from a city or state — common in the COVID era for buying equipment or upgrading a store — aren’t recurring income. You won’t get them every year, so they don’t go into SDE.
🔑 Insider Key
Interest income is the one people miss. It looks like profit on the books, but it comes from the owner’s cash pile — not the laundromat — so it has no place in seller discretionary earnings.
Putting It Together: 3x SDE and the Gross Revenue Cross-Check
Once you’ve built a clean SDE number, the multiple follows. In Ian’s view, for an average well-run laundromat in America, roughly 3x SDE is a fair market rate. At that price you’re not getting a steal, but you’re not being ripped off either.
Here’s why gross revenue and SDE work so well together: 3x SDE often comes out to about 60 weeks of gross revenue — which drops you right back into that 50 to 70 week band. The two numbers triangulate. If your SDE-based price and your gross-revenue gut-check are pointing at wildly different figures, that’s your signal to dig back under the hood. For a one- or two-owner operation, these are the two most important numbers in the deal.
SDE vs. EBITDA: When Each Number Matters
EBITDA gets its own episode next in the series, but the short version is this: EBITDA is the number you look at as if someone else ran everything for you. It assumes the laundromat is professionally managed and that a hired manager takes the owner’s salary — which is exactly why EBITDA is smaller than SDE. With SDE, most owners are paying themselves a salary or working in the business in some way, and that effort reduces the overhead that EBITDA has to carry.
The SBA guidelines line up with this. They point to SDE for businesses under $5 million in revenue and EBITDA for $5 million and up. So if you’re under five locations and $5 million, with an LLC or an LLC filing as an S-Corp, seller discretionary earnings is your key number. Once you scale past that — say you’re running 30 laundromats, not three or four — EBITDA gets more important, because you’ll be replacing everything the owner did with paid management.
A couple of other numbers round out the picture. Free cash flow (FCF) is really a banking metric. Net income is what you legally pay taxes on, but it’s the least reliable indicator of value, because depreciation, amortization, and a Section 179 election can crush it in any given year. When all the numbers behave, they tend to line up: one to two times gross revenue, around 3x SDE, roughly 4x EBITDA, about 5x free cash flow, and net income times six or more. Net income can swing to times ten in a heavy Section 179 year, which is exactly why you don’t anchor on it.
🔑 Insider Key
Gross revenue is all the money. SDE is what you actually take home as an owner-operator. EBITDA is what you’d net if a corporation ran it for you. Know which one a seller is quoting.
Up Next in This Series
This is Part 2 of a four-part laundromat valuation series running alongside the printed feature in Full Cycle Magazine. Part 1 covered the asset sale and the lease. Part 3 covers EBITDA and free cash flow: what each one measures, how they compare with SDE and why banks lend on free cash flow.
Questions owners ask
What is seller discretionary earnings (SDE) for a laundromat?
Seller discretionary earnings (SDE) is a laundromat’s total pre-tax profit with the owner’s salary and the owner’s discretionary, non-essential, and one-time expenses added back. It represents the full amount of cash a single owner-operator can expect to take out of the business, which is why brokers, the SBA, and most buyers use it as the primary valuation metric for laundromats doing under $5 million in revenue.
What gets added back into a laundromat’s SDE?
The biggest add-back is the owner’s S-Corp salary, which by definition must go into SDE. You also add back unnecessary personal vehicles and their expenses, trade show and conference travel such as the Clean Show or Excellence in Laundry, redundant family payroll for roles that disappear after the sale, and lifestyle extras like magazine subscriptions. Each of these moves from the expense bucket into the earnings bucket you pay a multiple on.
Does interest income count toward laundromat SDE?
No. Interest income earned on cash held in an investment account is non-operating revenue generated from a non-operating part of the business, not from running the laundromat. A buyer is not purchasing that cash and would not hold the same investments, so interest income does not belong in seller discretionary earnings.
What else should be left out of SDE?
Besides non-operating interest income, leave out one-time equipment sales, such as proceeds from selling old washers and dryers after a replacement, and cash windfalls like one-time city or state grants, which were common in the COVID era. Because none of these repeat year over year, they should not be included in the SDE multiple you base your offer on.
What is a typical SDE multiple for a laundromat?
For an average well-run laundromat in the US, roughly 3x SDE is a fair market rate, according to Ian Gollahon. At that price you are not getting a steal, but you are not overpaying either. That same 3x SDE figure often works out to about 60 weeks of gross revenue, which lands back inside the typical 50 to 70 week valuation range.
How is SDE different from EBITDA for a laundromat?
The main difference is the owner’s salary. SDE assumes an owner-operator who works in the business and keeps that salary, so it adds the salary back into earnings. EBITDA assumes the laundromat is professionally managed and that a hired manager takes the owner’s salary, which makes EBITDA smaller. The SBA recommends SDE for businesses under $5 million in revenue and EBITDA for larger operations.
Ian Gollahon
CEO & Co-Founder, Wash-Dry-Fold POS®
Ian Gollahon is co-founder of Wash-Dry-Fold POS, a laundromat point-of-sale system built from the operating experience of laundromat owners, and co-owner of Liberty Laundry in Tulsa, Oklahoma. His commentary here draws on more than a decade of operator and customer conversations about laundromat valuation, SDE and EBITDA, verifying gross revenue, machine start reporting and add-backs in a laundromat sale.
Full episode transcript
Ian Gollahon 00:05
Hello and welcome to the Laundromat Ownership Podcast. I'm your host, Ian Gollahon Me and my business partner Brian Henderson have three laundromats in the Broken Arrow, Oklahoma area. In 2025, those laundromats did $2.5 million in revenue. And we are also the founders and owners of the original laundromat point of sale system, Wash-Dry-Fold POS. Today is actually going to be part two in a series about laundromat valuation metrics.
If you saw part one, this is being done in cooperation with Full Cycle, the magazine from the CLA. And in the first edition, we talked about mainly two things that most laundromats are done what's called via an asset sale.
But that doesn't mean it's necessarily just the assets that you're purchasing. You're definitely purchasing goodwill in there as an as an intangible asset. So don't think you're gonna get off paying just for the machines. And then we also talked about negotiating leases and the benefits of having real estate. So the very first two pieces of this four part episode, was about the asset sale and leasing versus real estate.
The second part today's edition, which is on this the second full cycle magazine. These are quarterly and you can get them from the CLA. They'll ship them out to your house. This one will have more information than just what I go over, so it's still worth having and reading, but it's going to focus on the two first earnings that you would see if you were comparing the earnings.
In size, right? With the biggest first being gross revenue, and then the second biggest being SDE or seller discretionary earnings. And SDE really is the most important number when you're talking about laundromat selling or buying, in my opinion. So let's start at gross revenue. It's a pretty easy number to understand, and it's actually pretty useful.
For gauging roughly how much a laundromat is worth. Now you could you could never make an offer based solely on gross revenue, and we'll go over why. But it's essentially every single dollar of top line revenue that comes into that laundromat. And the reason it's useful is because laundromats typically sell somewhere between one to two X gross revenue, a year's worth of gross revenue.
And it's actually even what you'll hear people say. I read this on a you know, some blog from Eastern funding from some time ago, but I found it to be pretty relevant, which is that a lot of people will finance, or certainly Eastern funding will often finance you for 50 to 70 weeks of that laundromat's revenue. And that's kind of where they start with valuation. Now, it doesn't give you enough.
Information about the laundromat because it doesn't tell you what the expenses are for the laundromat. They might have an enormous payroll, they might have an enormous overhead for rent. Maybe they have a really bad lease and they're paying a lot of really high cost there. They might have low prices and their utilities are super high. There's all kinds of things once we look under the hood of the vehicle that we might find.
That gross revenue doesn't really address. However, it does get you started. And in a typical laundromat, I would even venture to say 90 something percent of laundromats in the US, you will kind of arrive at that 50 to 70 weeks as a fair market valuation. And in fact, when we bought Liberty Laundry back in 2023, we bought the operational part of that laundromat, so not the
Not the real estate, but the operational, the business part of it. It was slightly more than 1x revenue. And now we did buy real estate with that purchase as well for two of the three properties. And that really helps justify a little bit more of a premium.
Price on the business itself because you have more security there long term. But it still fell in that 50 to 70 weeks worth of revenue, even though we weren't looking at that at all to figure out that price. So I give that to you. If you if you know nothing else besides gross revenue, you actually still have a pretty good place to start at what you think that laundromat might be worth. Do not make an offer based on just.
Gross revenue because there might be things under that hood that make that laundromat essentially worthless. So you don't want to overcommit based on gross revenue. However, it's a really good place to start. And what I like to use it more with is in conjunction with the second metric that we're going to look at today, which is SDE. Now you could see if gross revenue is all the revenue, SDE is a reduced amount of that revenue. And
Most brokers are going to use this. The SBA recommends this for small businesses doing under 5 million in gross revenue annually. They recommend doing SDE as the primary valuation metric, and that's what they will loan based off of. And even other laundromat owners, they actually are using SDE, but they will almost always call it something else. And that's not
because they have some great insight, it's because they don't know the name of the metric that they're using. In fact, a good example of this is I was looking at a sheet kind of put together for the revenue of a laundromat for a prospective buyer. And this particular laundromat was an LLC filing as an S-Corp, which is the exact same corporate structure that Liberty Laundry uses.
And if you'd like to know more about why that's the most tax-advantaged structure for a laundromat doing hundred thousand dollars plus in profits each year, I have a whole episode on that. I'll link to in the show notes. But as far as the LLC filing as an S-corp, what they had in this little, they had an EBITDA sheet. Now, EBITDA is something very specific, and we're gonna talk about that next episode.
It did give me the numbers that I wanted though, and it did give a very good idea of it was essentially the QuickBooks numbers, which is what I would probably rather have anyway, so that I can figure out my own EBITDA from that. But
Then they called it adjusted EBITDA, which adjusted EBITDA is just taking in and out one-time expenses. So it wasn't actually adjusted EBITDA. What they were adjusting it to was SDE, which is seller discretionary earnings. And how were they adjusting that? Well, typically in a laundromat, most laundromats are structured as LLCs. And if they're profitable laundromats, they're structured sometimes as LLCs, filing as S Corps, if they're highly profitable.
And this laundromat was highly profitable and was structured as such. And when you're doing that, you have to, as part of filing as an S-Corp, pay the owner a salary. So the owner is an employee of the company. So when you're buying that laundromat, if you think about it, you're gonna get sure all the what you would call distributions. So you're gonna get all the profits, the net profits. Again, net profit, I really just see that as a tax number, but
A lot of people think about net income or net profit as a operational number, but the amount of money that that you're going to claim with the IRS that is yours to spend how you like, you're gonna get that as distributions and you're gonna pay taxes on that. But if you think about it, you're also gonna get your salary and you pay taxes on that. And so when you're trying to calculate SDE, you are going to include that salary number.
In SDE because you as the new owner will pay yourself that same salary if you're keeping it as a S-corp. Maybe you're just going to be an LLC and not an S-corp. Well then you wouldn't pay anyone that salary. That would go straight into your distributions. Now the interesting thing I'm not going to get super into EBITDA because that's for a different episode and it really does require quite a bit of time to explain. But the biggest
Difference between SDE and EBITDA in a laundromat is absolutely that owner's salary. And in owner's salary, it's part of the larger circle. So that's why the circle's larger, because it has that salary in there. In EBITDA, it's not part of it because when you're talking about EBITDA, you are assuming that it's going to be professionally managed and that that manager is going to take that owner's salary.
One of the things we really want to make sure that we understand about SDE for laundromat is what are the big things to put in there and what are the big things to take out of it. So the biggest thing by far is the S-Corp salary. You would add that back into that earnings multiple, the SDE earnings multiple. If you're not putting that earnings multiple back in there, then you're not really calculating SDE. So by definition, this has to go into the SDE number.
Another good example to look out for is unnecessary vehicles. Maybe these are daily drivers that the laundromat owner has. And I'm sure he buys some supplies with them, he or she. But it's not really something that you're going to keep on the balance sheet. And it's not something that you're going to continually pay the expenses for. And so the expenses for unnecessary vehicles could be added into SDE. These are things that would make it go bigger.
What if they have you know like a trade show?
For example, if they went to the clean show, if they went to the excellence in laundry conference, those can be thousands of dollars and they're playing for the flights and the food and the and the five-star hotel. Well, that was part of their seller discretionary earnings. And as the new owner, it's going to be part of your discretionary earnings. And so if you're not going to the excellence in laundry, or if you're not doing the laundromat millionaire conference or whatever it is.
Either way, you would include that in your SDE because it's going to be part of your discretionary earnings. And so if it's in the expense bucket, you want to kind of move it into the bucket of what you're going to pay a multiple on. And that's what makes the SDE the second biggest bucket, if you will, of revenue. Another good example to look out for are family members that are maybe on the payroll for the laundromat, but maybe if they quit, you wouldn't be any worse off for it.
And so if there's people that are not gonna still be there once you take over the laundromat, again, this is typically a family member who's on the payroll, but they're not really maybe contributing as much to the day-to-day operations, or maybe their role becomes redundant once you are the owner, then I would put that payroll into the SDE as well. And then the last thing, and this is a good one.
There's a lot of times these little lifestyle extras that people will put, and you'll see it on the expense sheet as like a good one for example for us when we bought Liberty Laundry is magazine subscriptions. And so there's all these different kinds of music and lifestyle magazines that the previous owner would have for the customers of Liberty Laundry to read. They also happen to be the laundry or the types of magazines that he would want to read.
And as the new owners, there's a lot that we did. We kept the free coffee and all that, but we did not keep all the magazine subscriptions. And so when we were making our offer and we were trying to figure out how much revenue would actually go into our pockets as the new ownership, we were able to keep take that out of the expense bucket and put it into the SDE bucket. A few things that should not be put in the SDE bucket would be
Non-operating income, right? That could be maybe they have some cash on hand and they have it in an investment account, and that investment account is generating some cash. That's called non-operational revenue. It's just interest they have on their free cash. That's not really part of the business. You're probably not gonna buy that cash. You probably wouldn't have the same investments. So it just doesn't make sense to include that. That's not part of the earnings multiple that you're buying.
A more important thing would be if they sold some old washers and dryers, maybe they replaced them recently, they had some equipment that they sold. That's going to be a one-time revenue bump that should not be included in the earnings multiple that you're that you're buying based off. And then lastly would be what we call a windfall, cash windfall, which a lot of times would be like grants from your local city or state. We saw a lot of that in the COVID era where
a lot of these laundromats had these one-time grants to buy some equipment or to update or to somehow invest in their laundromat. And because you're not getting that every year, you're not going to include that in your SDE multiple. And so that's a really good example of things that you do not want to put in the SDE and things that you do want to put in the SDE. And so getting back to if you're gonna value.
Based on S D E
Usually in the average well-run laundromat in America, if you were to take, hey, what's the real amount of cash that it's up to me to spend?
Typically 3x SDE or 3. SDE is probably a good market rate for that laundromat. You're not getting it for steal. But if you're paying, you know, 3x SDE, you're not, you're not being ripped off either. And a lot of times that same number, let's say 3x SDE, it'll end up being about 60 weeks worth of revenue, which puts us right back in our gross revenue. So these two numbers.
In my view, are the most important numbers for buying a laundromat, especially if you are a one or two owners, maybe you're somewhat like me and my business partner, and you're not some giant corporation. If you're a giant corporation, you probably are going to be more interested in the EBITDA number, which really is a little bit smaller. That'll be our next series. We'll talk about EBITDA.
And that really is the number you're looking at it as if somewhere else was doing everything, right? And so it's not really the same as the seller discretionary earnings because typically, as a seller, they're either paying themselves a salary or they're contributing themselves to the laundromat in some way. And when you look at EBITDA, you are going to need to replace everything that they're doing and you're going to have it professionally managed because this is one of 30 laundromats that you own, not one of three or four.
And so that EBITDA number, again, if you look at the SBA guidelines on this, they recommend EBITDA for five million and up And so that's why the SDE is really the key number for a laundromat, doing less than five million in revenue if you have an LLC or corp or an LLC filing as an S Corp. If you're under five locations, five million in revenue, I think SDE is most important.
Once you get over that, EBITDA probably gets more important. We'll talk about that more. FCF, which is free cash flow, is really more of a banking matrix. And net income, because you've got the depreciation and amortization, this is really what you're reporting to the your IRS is, or to the IRS, is your net income. And a lot of times all these numbers will line up pretty well to where, you know, maybe one point.
One gross revenue is the same as 3X STE, and that's the same as 4X EBITDA. That's the same as 5X free cash flow. And that's net income times six. Net income is the least reliable. It might be net income times 10, depending on if they had a section 179 election, and that would really reduce their net income that year. So net income is the least.
Valuable if you are counting amortization, depreciation, section 179 election in your QuickBooks. If all that gets documented there, then and net income specifically and legally is what you pay the tax, is what you pay taxes on. And what you're really trying to look at is as the new owner of this business.
What amount of the money is going to be discretionary for me to spend? And you might spend it on interest, you might spend it on more vehicles, you might get rid of the vehicles, you might pay yourself a salary, you might not. But it really kind of gives you a good idea of how much profit, how much operating profit is this laundromat going to be making under my hands?
And that's seller discretionary earnings. And as the buyer, that becomes your discretionary earnings once you take over the laundromat.
So I hope this was helpful for you today. If anyone ever says SDE.
EBITDA or gross revenue, you will know gross revenue is the big one with all the money. SDE is what revenue you actually get as the owner. And then EBITDA is like if you had it professionally managed by a large corporation, that would be how much revenue you would expect to get out of it. And of course, that's smaller than SDE because with SDE, most owners are paying themselves a salary or so in some way involved that reduces that overhead of EBITDA.
So hopefully that helps you out with all these definitions and you won't be caught off guard.
Thanks and have a great week.