How to Value a Small Business for Sale in South Florida

How to value a small business for sale in South Florida: seller's discretionary earnings, EBITDA, add-backs, the lease, assets and inventory, deal structure, and testing the asking price.

By Tyson E. Sam, Founder and Broker of Record · September 18, 2026

Most small businesses for sale in South Florida are valued on the cash they produce for one owner, known as seller's discretionary earnings (SDE), multiplied by a factor that reflects how risky and transferable those earnings are. The result is then adjusted for what the sale includes, such as equipment and inventory, and for the terms of the deal. Larger businesses with a management team in place are usually valued on EBITDA instead.

The asking price in a listing is the seller's opinion. To value a business yourself, rebuild the earnings from records you can verify, judge the risks a lender and a buyer will price in, and then check the result against what similar businesses are listed and selling for. The live market table on the businesses for sale hub shows current counts and median asking prices by industry, city and price range, updated daily from the MLS.

Start with earnings you can verify

The gross income figure in an MLS listing is the top line, not what an owner takes home. Ask for:

Three years of federal tax returns for the business, and the year-to-date profit and loss statement.
Bank statements and merchant processing statements, to test reported sales against deposits.
Florida sales tax returns, where the business collects sales tax.
Payroll records showing who is paid, how, and what the owner pays themselves.

Then reconcile them. If the profit and loss statement shows far more than the tax returns, a lender will generally rely on the tax returns, and so should your offer. Income that was never reported is not income you can finance or safely pay for.

Seller's discretionary earnings, step by step

SDE starts with the business's pre-tax profit and adds back expenses that a new owner-operator would not carry, or that do not reflect the cost of running the business:

One owner's salary and the payroll taxes on it.
Documented personal expenses run through the business, such as a car, a phone or health insurance.
Interest on the seller's debt, which will not transfer to you.
Depreciation and amortization, which are accounting entries rather than cash spent that year.
Genuinely one-time costs, such as a lawsuit settlement or storm repairs, backed by invoices.

Then test each add-back. A spouse or relative working without pay is a cost you will have to cover. Rent paid below market to the owner's own building will rise under a new lease. Equipment that has been kept running instead of replaced will need capital. And if you will not work in the business full time, subtract the cost of the manager who replaces the owner's labor.

SDE or EBITDA?

SDE fits a business where one owner works in the business and draws its earnings, which describes most of the restaurants, salons, stores and service businesses on the market. EBITDA (earnings before interest, taxes, depreciation and amortization) fits a business run by paid managers, where the buyer is an investor, and it treats a market salary for every management role as an expense. Check which measure a listing uses before you compare its price with another.

From earnings to a price

The factor applied to the earnings reflects risk. A business is worth more when its earnings are likely to continue under a new owner, and less when they depend on something that may not transfer. Weigh:

Owner dependence. Is the owner the chef, the lead stylist or the license holder, and will a training period be enough to hand over the relationships?
Staff. Will key people stay, and are they employees or contractors?
Customers. Is revenue spread across many customers, or concentrated in a few accounts or a single contract?
Trend. Three years of rising sales are worth more than one good year after two weak ones.
Seasonality. Many South Florida businesses do much of their volume in the winter season, so look at monthly sales rather than annual totals, and at how the business came through recent hurricane seasons.
Licenses. Liquor licenses, childcare licenses from the Department of Children and Families, and professional and health licenses must transfer or be reissued, and some carry value of their own.
Industry. Restaurants, salons and service businesses carry different risks, so compare a business with its own category, such as restaurants or hair salons.

Finally, test the price against the financing. If you borrow, the earnings must cover the loan payments and a reasonable salary for you, with room to spare. A price that fails that test is too high for you, whatever a rule of thumb says.

The lease can make or break the value

For a business that depends on its location, the lease can matter as much as the equipment. Read:

The remaining term and any renewal options. SBA lenders generally want the lease, including options, to run at least as long as the loan.
The assignment clause, and whether the landlord will consent to the transfer and on what terms.
Rent increases, common area maintenance charges and any personal guarantee you will be asked to sign.
The permitted use, and any relocation or demolition clause.

Rent that is high relative to sales reduces what a buyer should pay, because it reduces the earnings that remain.

What the price includes

Furniture, fixtures and equipment. Confirm what is owned and what is leased, the condition and age of the major items, and whether any liens are recorded against them; a search of the Florida Secured Transaction Registry shows filings against the business.
Inventory. It is usually sold on top of the asking price at cost, counted just before closing.
Cash, receivables and payables. In most small business sales the seller keeps the cash and the receivables and pays the debts.
Real estate. If the building is part of the sale, value it separately as real estate; our commercial real estate team can help price it.
Intangibles. The name, phone numbers, website, social accounts, customer lists and recipes, plus a non-compete and a training period from the seller.

Asset sale or stock sale

Most small business sales are structured as asset sales: the buyer's new company acquires the equipment, inventory and goodwill, and the seller's company, with its past liabilities, stays behind. Sellers sometimes prefer a stock sale for tax reasons or so that licenses and contracts stay in place. Buyer and seller also agree how the price is allocated among equipment, inventory, goodwill and the non-compete, which both report to the IRS on Form 8594 and which changes the after-tax result for each side. Work through the structure with a CPA and a business attorney, and ask your attorney how to protect yourself from any unpaid Florida taxes the seller leaves behind.

Terms change the price

A higher price with part of it seller-financed can be a better deal than a lower all-cash price, because the seller shares the risk that the earnings hold up. Earn-outs tied to future results, holdbacks and the length of the training period change the value in the same way. The seller financing page lists businesses whose owners will carry part of the price, and the price reduced page shows those whose asking price has already been cut.

Check the result against the market

Compare your figure with current asking prices for similar businesses in the same industry and county, remembering that asking prices are not sale prices, and with any closed-sale data your broker can provide. On larger purchases, SBA lenders commonly require an independent business valuation, and a quality-of-earnings review is money well spent.

If you are also moving to South Florida for the business, the Broward County real estate hub and the Broward County housing market report show what homes cost near many of the region's commercial corridors.

Found a business and want the numbers tested before you offer? Read how buying a business works with BreakThru and talk to one of our business brokers; there is no fee to the buyer. If you own a business and want to know what it is worth, request a confidential business valuation.