How Much Is My Business Worth? A Florida Owner’s Guide to Business Valuation
Short answer: Your Florida business is worth what a qualified buyer will pay for its future cash flow. For most owner-run businesses that starts with seller’s discretionary earnings (SDE), then gets adjusted for risk: how steady the earnings are, how much the business depends on you, how concentrated your customers are, your lease, and your industry. Revenue sets the size of a business; earnings and risk set its value. A free, confidential valuation gives you a realistic range for your own business.
When business owners start thinking about selling, the first question is almost always: How much is my business worth?
It sounds simple enough. But business valuation is more nuanced than most owners expect. The answer depends on your industry, your financials, your growth trajectory, and what buyers in your market are currently willing to pay. Let’s break it down in plain language.
What a valuation actually measures
A valuation estimates what a ready, informed buyer would pay and a ready, informed seller would accept, with neither one forced into the deal. It is not a measure of the years you’ve put in, the money you’ve invested, or the number you need to retire. Buyers pay for future cash flow and for how confident they are that it will keep coming after you leave.
That’s why two owners with the same sales can get very different answers. Revenue tells a buyer how big the business is. Earnings, and the risk attached to them, tell the buyer what it’s worth.
Why your number matters even if you aren’t selling
Most owners ask this question when they’re ready to sell. Knowing it earlier also helps, because it shows you what is holding the price down: owner dependence, a concentrated customer list, messy books, or a short lease.
A current number also helps with decisions that have nothing to do with selling. Bringing in a partner, setting the price in a buy-sell agreement, planning your estate, or deciding whether to open a second location all go better when you know what the business is worth today. And if a competitor calls with an offer, you’ll know whether it’s serious.
The starting point: Seller’s discretionary earnings
For small to mid-sized businesses, which covers most businesses in Florida, valuation typically starts with Seller’s Discretionary Earnings, or SDE. This is the total financial benefit an owner-operator receives from running the business each year.
SDE adds back to net profit: your owner salary, personal expenses run through the business, depreciation, amortization, interest, and any one-time costs that won’t continue after the sale. In short, it reflects the real earning power of the business under your ownership.
Once you have your SDE, the price depends on how confident a buyer is that those earnings will continue. That judgment is shaped by several factors:
- Industry: Service businesses, retail, restaurants, and healthcare all have their own typical ranges
- Business size: Larger, more established businesses usually command stronger pricing, often from a different set of buyers
- Revenue stability: Recurring revenue and long-term contracts significantly increase value
- Transferability: Can the business run without you? The more it can, the more it’s worth
That is why two businesses generating the same SDE can sell for very different prices depending on quality, industry, and current market conditions.
How I recast your financials
SDE starts with your tax returns and profit and loss statements, then adjusts them so a buyer can see what the business really earns. This is called recasting, and I work through it in this order:
- Gather three years of tax returns and profit and loss statements, plus the current year to date.
- List everything the business pays for you: salary, payroll taxes on that salary, health insurance, retirement contributions, and any vehicle or phone it covers.
- Identify true one-time costs, such as a lawsuit settlement or the cost of moving locations, and keep the paperwork that proves each one.
- Remove personal expenses that ran through the business, with statements showing they were personal.
- Tie the final numbers back to your bank deposits and tax returns.
Buyers accept add-backs they can verify. They push back on cash sales that never reached the books, “one-time” costs that show up every year, and claims that a new owner could simply raise prices. If the buyer finances with an SBA 7(a) loan, the lender must check the seller’s financial information against IRS tax transcripts, so income that isn’t on your returns generally can’t support your price. My guide to seller’s discretionary earnings has more examples.
Source: U.S. Small Business Administration, including its 7(a) loan program page and its SOP 50 10 lending rules. SBA rules change, so verify current requirements with the SBA or an SBA lender before relying on them.
Larger businesses: EBITDA
As a business grows and a management team takes over the owner’s role, buyers often shift to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This metric looks at the business as a more independent entity, separate from what the owner pays themselves.
These larger deals tend to attract private equity groups and strategic buyers who compete for strong businesses, which supports stronger pricing.
What pushes your value up
- Consistent year-over-year revenue growth
- A diversified customer base, with no single client driving a large share of revenue
- Documented processes and systems that reduce owner dependency
- Recurring revenue or long-term service contracts
- A strong online reputation and positive customer reviews
- Clean, well-organized financial records going back at least three years
- A stable, trained team that would likely stay after the sale
What brings your value down
- Heavy owner dependency: revenue that exists because of your personal relationships
- Customer concentration risk
- Inconsistent or declining revenue trends
- Disorganized financials or personal expenses mixed with business ones
- A short remaining lease term with no guaranteed renewal
- Deferred maintenance or aging equipment that needs replacement
Other valuation approaches
Beyond earnings-based methods, appraisers and brokers also look at comparable sales and at the value of the assets. The right approach depends on your situation, and I can walk you through which method fits your business.
Comparable sales
Brokers and appraisers use databases of closed small business sales. I look for deals in the same industry, at a similar size, and as recent as possible, then see how buyers priced businesses with similar earnings, growth, and risk. Comparable sales keep a valuation tied to what buyers actually paid, not what sellers hoped for. The limit is that every deal has its own terms, so the data is a guide, not an answer.
Future earnings
The income approach asks what the business’s future cash flow is worth today, after accounting for risk. A steady business with loyal customers and a team that runs without you gets more credit for its future earnings than one that depends on you or on a single contract. Credentialed appraisers often use this method alongside comparable sales.
Assets as a floor
When earnings are thin, value falls back to what the assets would bring: equipment, vehicles, inventory, and sometimes the customer list. A profitable business is worth more than its assets because the buyer is paying for the earnings those assets produce. If your earnings barely cover a fair wage for running the business, expect buyers to focus on the assets.
What the price usually includes
Most main street sales in Florida are asset sales. The price usually covers the equipment, furniture, fixtures, business name, phone numbers, website, customer lists, and goodwill. Cash and accounts receivable typically stay with the seller, and the seller pays off business debts at closing. Inventory is often counted near closing and added to the price at cost.
Real estate is appraised separately from the business. Terms matter as much as the headline number, too. A price paid partly over time through seller financing, or tied to future results, is worth less to you than the same price in cash at closing, and buyers know it.
Why the buyer’s lender tests your price
Many buyers finance with an SBA 7(a) loan, and the lender doesn’t take your asking price on faith. Under SBA’s current lending rules, the business valuation must be ordered by and prepared for the lender, not the buyer or the seller. Above a deal size that SBA rules set, it must come from an independent appraiser who holds a recognized business valuation credential.
If the price is higher than that valuation supports, the difference has to be covered by the buyer’s own cash, not by more borrowing. In practice, an overpriced business either loses its buyer or gets renegotiated late in the deal. Pricing to a value you can defend from the start avoids both. I explain the rest of the lender’s review in how SBA loans affect your sale.
Valuing a business in St. Augustine and Northeast Florida
Local conditions show up in the numbers. Many St. Augustine and Northeast Florida businesses have a seasonal rhythm tied to visitors, beach traffic, or part-year residents, so buyers study the trailing twelve months and how much cash the business keeps through the slow months. A strong season helps only if it carries the quiet ones.
Location and lease carry real weight here. A good spot with a long lease and renewal options is part of what a buyer is paying for, and so is a strong review profile in a market where many customers find you online first. For coastal locations, buyers and lenders will also ask about flood zones and insurance costs. My guide to selling a seasonal business in Northeast Florida covers how to present those swings.
Mistakes that distort an owner’s number
- Pricing to what you need for retirement instead of what the business earns.
- Counting effort and years invested as value. Buyers pay for earnings that will transfer to them.
- Listing high to leave room to negotiate. Overpriced listings sit, and buyers start to wonder what’s wrong.
- Treating an online calculator result as the final answer. It’s a starting range, and it can’t read your lease, your customer list, or your books.
- Waiting until burnout or a health problem forces the sale, when there’s no time left to fix what’s holding value down.
Prefer to watch? I cover this in a video on my channel.
Frequently asked questions
What is the difference between revenue and SDE?
Revenue is everything the business takes in. SDE is what is left for one full-time owner after normal operating costs, with your own pay, benefits, and verified personal or one-time expenses added back. Buyers and lenders price a business on earnings, not revenue, so two businesses with the same sales can be worth very different amounts.
Do I need a certified appraisal to sell my business?
Usually not to list it. A broker’s opinion of value based on your financials and comparable sales is the normal starting point for a main street sale. If your buyer uses an SBA loan, the lender orders its own valuation, and situations like estate planning, gifting shares, divorce, or a partner dispute often call for a credentialed appraiser. Confirm with your CPA or attorney what your situation requires.
What documents do I need for a business valuation?
Start with three years of business tax returns and profit and loss statements, a current year-to-date statement, and a balance sheet. Add your lease, a list of major equipment with its condition, payroll by position, and a short note on any personal or one-time expenses the business paid. The cleaner the package, the faster and more accurate the valuation.
How often should I update my business valuation?
Once a year is a good habit as a sale gets closer, and any time something big changes, such as losing a major customer, signing a new lease, or adding a manager. Value moves with your earnings and your risk, so an old number can mislead you.
Can I find out what my business is worth without anyone knowing?
Yes. My valuations are confidential, and getting one doesn’t commit you to selling. Your employees, customers, and competitors don’t need to know you asked.
Find out what your business is worth
You don’t have to guess. Use my free business valuation calculator to get a quick estimate based on your actual numbers. Or if you’d like a deeper analysis of your specific business, reach out for a free consultation. Knowing your number is the foundation of any smart exit plan.
Disclaimer: This article is general information, not legal, tax, accounting, or financial advice. I am a licensed business broker, not an attorney or accountant. Every business and every sale is different, and laws and tax rules change, so talk with a licensed attorney and a CPA about your situation before you act on anything here. SBA loan rules also change, so verify current requirements with the U.S. Small Business Administration or an SBA lender.
