How Much Is My Business Worth? A Florida Owner’s Guide to Business Valuation
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.
The Most Common Method: SDE Multiples
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, you apply a market-based multiple. That multiple is shaped by several factors:
- Industry: Service businesses, retail, restaurants, and healthcare all have their own typical ranges
- Business size: Larger businesses generally command higher multiples
- 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
For most Main Street businesses in Florida, SDE multiples typically range from 2x to 4x. A business generating $200,000 in SDE might reasonably sell for $400,000 to $800,000, the exact number depends on quality, industry, and current market conditions.
Larger Businesses: EBITDA Multiples
For businesses with $500,000 or more in annual earnings, 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.
EBITDA multiples tend to run higher (4x to 7x or more for quality companies) because these deals attract private equity groups and strategic buyers who compete aggressively for strong businesses.
What Pushes Your Value Up
- Consistent year-over-year revenue growth
- A diversified customer base, no single client driving more than 20% 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 SDE and EBITDA multiples, some businesses are valued on assets (useful for equipment-heavy or real-estate-based businesses) or on a revenue multiple (more common for certain tech or subscription businesses). The right approach depends on your specific situation, a good broker can walk you through which method makes the most sense.
Find Out What Your Business Is Worth
You don’t have to guess. Use our 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.
Curious What Your Business Is Worth?
Get a free, data-driven estimate in under 3 minutes, no obligation, completely confidential.