Main Street vs. Wall Street: Why SDE Matters More Than EBITDA for Single-Provider Practices
“EBITDA is for Wall Street deals, but Main Street runs on Sellers Discretionary Earnings (SDE). When you’re buying a single-provider practice, your focus is Main Street (SDE)—not Wall Street (EBITDA).”
We say this often at Wicklow, because it’s a critical distinction that many buyers (and even some advisors) miss.
When a corporate buyer or private equity group is evaluating a multi-doctor practice, they want to know what the business throws off in pure operational profit—before interest, taxes, depreciation, and amortization. That’s EBITDA. It’s clean, it’s scalable, and it makes sense for investors who won’t be the ones seeing patients. In short: that’s Wall Street.
But when you’re buying a single-doctor practice—and you’re planning to be the doctor—you’re not just buying a business. You’re stepping into someone’s shoes. Their schedule, their income, their lifestyle. That’s where Seller’s Discretionary Earnings (SDE) comes in.
What Is SDE?
SDE = Net Income
Owner’s Salary
Personal Expenses Run Through the Business
One-Time or Non-Recurring Expenses
Depreciation & Amortization
Interest & Taxes
It’s essentially the total financial benefit the owner took home. That includes their salary, perks (like their car lease or continuing education), and any other personal or discretionary spending.
SDE tells you what you can earn as an owner-operator. It’s the number that matters when you’re buying a job and a business, not just an investment.
Why EBITDA Doesn’t Fit Solo Practices
Most solo practices don’t have an EBITDA—at least not one that’s meaningful. Here’s why:
The doctor is the business. In a single-doctor practice, the owner isn’t just managing operations. They’re driving 90–100% of the production.
There’s no ‘management layer’ to normalize. Wall Street deals remove the owner’s involvement and plug in a salaried replacement. In a solo practice, that’s you.
Personal expenses are often embedded. Want to know how much the seller really took home? You have to dig into SDE.
Trying to apply an EBITDA multiple to a solo practice is like trying to price a used car based on the cost of manufacturing a new one. It just doesn’t translate.
Focus on What Matters: Your Take-Home
When you evaluate a solo practice, you should be asking:
What did the seller really earn after all expenses?
How much of that can I expect to take home if I step into this role?
What adjustments do I need to make based on how I’ll run the practice?
This is why SDE should be front and center in your analysis. It reflects the actual owner cash flow—and in most single-doctor practices, that’s what you’re buying: income, stability, and the ability to grow something.
Final Thought
When we work with buyers and sellers of Solo Provider Businesses at Wicklow, we keep it simple: Is this practice going to support the buyers lifestyle and financial needs?
If the answer is yes, and the SDE checks out, then it’s worth moving forward. Let the Wall Street crowd worry about EBITDA. If you’re buying your future as a provider-owner, stick with what matters on Main Street: SDE.
Thank you for your interest in Wicklow!
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