BreakThru Realty

How Much Is My Business Worth?

The short answer is that most small businesses sell for a multiple of what they pay one owner. The useful answer is what that figure is for your business and which multiple a buyer will accept.

Storefronts and parked cars along a small town main street at sunset

Reviewed by Tyson E. Sam, Founder and Broker of Record, BreakThru Realty, Florida License 3565210

Find Out What My Business Is Worth · (786) 914-1017

Start With Seller's Discretionary Earnings

Take the net profit on your tax return and add back what a new owner would not have to pay: your salary and payroll taxes, your health insurance, personal expenses run through the business, interest, depreciation and one time costs. The result, seller's discretionary earnings or SDE, is the total benefit one owner operator receives, and it is the base most businesses under a few million dollars are priced from. Larger businesses with management in place are usually priced on EBITDA instead.

The Multiple

Owner-operated main-street businesses commonly trade at around two to three times SDE, and the site's businesses-for-sale market figures show where Florida asking prices sit today. The multiple rises with recurring revenue, a long lease, trained staff, growing earnings and low owner involvement, and falls with declining sales, a short lease, a single large customer or books that do not match the bank.

When Assets Set the Price

A business that earns little is sold on what it owns: equipment, build-out, licences, the lease and sometimes the customer list. A restaurant space with a hood and a liquor licence has a value even when the restaurant does not make money. Knowing whether your business is priced on earnings or on assets tells you who the buyer is.

What Buyers and Lenders Will Check

A price is only real if it survives due diligence. The buyer's lender will compare your add backs with the tax returns and the bank statements, check the lease term and ask whether the business depends on you. A valuation that anticipates those questions gives you a price you can hold.

Find Out What My Business Is Worth

Tell us the type of business, the city, how long it has operated, annual revenue, owner benefit or seller's discretionary earnings, EBITDA if you track it, monthly rent and lease expiry, number of employees, how involved you are, why you are selling, your timeline and whether you would consider seller financing. A licensed BreakThru business broker prepares a confidential valuation from comparable sales and replies within one business day. Everything you tell us is confidential, the valuation is free, and nothing is listed or announced unless you decide to sell. Prefer to talk now? Call (786) 914-1017.

Questions Owners Ask

Will my employees, customers or landlord find out?
Not from us. The business is marketed without its name or address, buyers sign a nondisclosure agreement and prove their funds before they learn who you are, and showings happen after hours or are presented as something else. The landlord is approached only once there is an accepted offer, because the lease has to be assigned.
How long does it take to sell a business?
Six to nine months from listing to closing is common for a well prepared small business, faster when the price is right and the records are clean, longer for businesses that need a licensed buyer or a franchisor's approval. The escrow period after an accepted offer is usually sixty to ninety days.
What does a business broker charge?
Brokers selling small businesses usually charge a success fee paid from the proceeds at closing, commonly quoted in the market at around ten percent of the price, often with a minimum fee; larger sales are usually priced on a sliding scale. BreakThru's fee is set out in writing in the listing agreement before you sign anything, and the valuation costs nothing.

Sources

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