EBITDA
Written by Christopher Krassnig - Founder - Kairos Exchange and ZenoX Media.
Published
- Checks in every memo8
- Automatic on day one3 of 8
- Read by handad spend and processor payouts
- Tracked ecom salesEUR 200M+ZenoX ad-management figures, not Kairos deal volume - Kairos hasn't closed a deal yet.
EBITDA is earnings before interest, taxes, depreciation, and amortization. It starts from operating profit. Then it counts a paid manager's wage as a real cost. It does not add that wage back to the owner. Ecommerce buyers use it once a team, not one owner-operator, actually runs the store.
When Buyers Switch to EBITDA
The switch tracks who runs the business after the sale, not size alone. A buyer who plans to step into the store and run it prices on SDE, because the owner's own labor is part of what changes hands. A buyer acquiring an operation that already runs on a hired team prices on EBITDA instead, because replacing the founder costs a real wage the deal has to account for. Convention ties the switch to deal size, but management is what actually drives it.
Not to Be Confused With
- SDE
- SDE adds the owner's own salary back onto profit; EBITDA leaves a manager's wage in as a real cost.