Florida Authority Network | Updated September 11, 2026
Quick Answer
Most Florida small businesses (under $5 million in revenue) are valued as a multiple of Seller’s Discretionary Earnings (SDE), typically 2x to 3.5x depending on industry, size, and risk. Nationally in Q2 2026, the average cash flow multiple increased 2% year-over-year to 2.7, while the average revenue multiple remained essentially flat at 0.7, with a median sale price of $349,250. Larger businesses with management teams are valued on EBITDA multiples instead. Florida’s lack of a state income tax, its successor-liability tax rules, and its broker licensing requirements all shape how deals are priced and closed.
SDE vs. EBITDA: Which One Applies to Your Business?
| Metric | SDE | EBITDA |
|---|---|---|
| Stands for | Seller’s Discretionary Earnings | Earnings Before Interest, Taxes, Depreciation, Amortization |
| Typical business | Owner-operated, under ~$1M profit | Management-run, $1M+ profit |
| Owner salary | Added back | Deducted (market-rate manager cost) |
| Typical Florida multiple | 2.0x – 3.5x | 4x – 7x |
| Typical buyer | Individual, SBA-financed | Private equity, strategic acquirer |
SDE formula: Net profit + owner’s salary + owner’s benefits + interest + taxes + depreciation + amortization + one-time expenses + non-business personal expenses run through the company.
EBITDA formula: Net profit + interest + taxes + depreciation + amortization. If the owner is underpaid or unpaid, subtract a market-rate salary for a replacement manager.
The dividing line matters. A business showing $400,000 in SDE might show only $280,000 in EBITDA once a $120,000 general manager is priced in. A buyer paying 3x SDE and a buyer paying 5x EBITDA arrive at nearly the same number, which is why the two methods coexist.
How Are Business Multiples Calculated in Florida?
Multiples are not set by law or formula. They are derived from comparable closed transactions and adjusted for risk. Average earnings multiples range from 2 to 3.3 across popular sectors, with the average across all sectors at 2.58, per BizBuySell’s industry data through mid-2026.
Factors that push a Florida multiple up:
- Recurring or contract revenue (HOA maintenance, managed services, medical)
- Owner works under 20 hours a week; systems and staff run the business
- Three or more years of clean, tax-return-verified financials
- SBA 7(a) eligibility (buyers can finance 80–90% of the price)
- Transferable licenses, leases, and vendor agreements
- Growing Florida metro location (Tampa Bay, Orlando, Jacksonville, Southwest Florida)
Factors that push it down:
- Customer concentration above 20% with one account
- Owner is the primary salesperson or licensed professional
- Cash-heavy operations with unreported income
- Short lease term with no renewal option
- Hurricane-exposed physical assets without insurance continuity
- Declining revenue in the trailing 12 months
Valuation Methods Compared
| Method | How it works | Best for | Weakness |
|---|---|---|---|
| SDE multiple | SDE × industry multiple | Main Street businesses under $5M revenue | Multiples vary widely by sector |
| EBITDA multiple | EBITDA × industry multiple | Businesses with management depth | Overstates owner-dependent firms |
| Asset-based | Fair market value of assets minus liabilities | Distressed, asset-heavy, or liquidating firms | Ignores goodwill and earnings |
| Discounted cash flow | Present value of projected cash flows | Growth businesses, franchises | Highly sensitive to assumptions |
| Revenue multiple | Revenue × 0.4–1.2 | Quick screening; SaaS, agencies | Ignores profitability entirely |
| Market comps | Recent sales of similar Florida businesses | Any business with good comp data | Comp data is thin for niche sectors |
For an owner-run Florida business, the SDE multiple is the primary method and the others serve as a cross-check. A buyer’s lender will run its own version of the same math.
Worked Example: Tampa Bay HVAC Company
- Revenue: $2,100,000
- Net profit on tax return: $210,000
- Owner salary: $110,000
- Owner health insurance and vehicle: $28,000
- Depreciation and interest: $42,000
- One-time legal settlement: $15,000
- SDE: $405,000
Home-service businesses with recurring maintenance contracts are commanding the upper end of the range. At 3.0x, the business is worth roughly $1,215,000. At 3.5x with strong recurring revenue and a licensed technician team that stays, $1,417,500. Inventory and working capital are usually negotiated on top.
Step-by-Step Process to Value a Florida Business
- Pull three years of tax returns and P&Ls. Buyers and SBA lenders price off tax returns, not internal books. Unreported income is worth zero at closing.
- Recast the financials. Build the SDE add-back schedule line by line with documentation for each add-back.
- Identify the industry multiple range. Use BizBuySell, IBBA Market Pulse, or a Florida business broker’s closed-deal data for your sector.
- Adjust for risk factors. Move within the range based on owner dependence, customer concentration, lease, and growth trend.
- Cross-check with an asset-based floor. Value should never fall below net tangible assets plus a modest goodwill premium.
- Stress-test SBA financing. Confirm the debt service coverage ratio exceeds 1.25x at the proposed price. If not, the price is not financeable and the market will correct it.
- Get a broker opinion of value or a certified appraisal. Brokers often provide an opinion at no cost; a certified valuation (CVA, ASA, or ABV) runs $3,000–$10,000 and is required for SBA loans over $250,000 where goodwill exceeds a threshold, and for estate, divorce, or partner buyout purposes.
Florida-Specific Rules That Affect the Sale Price
No state income tax. Florida’s absence of personal income tax makes the after-tax proceeds to the seller higher than in most states and makes Florida businesses more attractive to relocating buyers. Federal capital gains tax still applies.
Business brokers must hold a real estate license. Under Florida Statutes Chapter 475, anyone brokering the sale of a business for compensation must hold a Florida real estate license. Unlicensed intermediaries cannot legally collect a commission.
Successor tax liability. Under F.S. 213.758, a transferee of more than 50% of the assets of a business (including real property) is liable for unpaid tax owed by the transferor arising from the operation of that business. Buyers protect themselves by requiring the seller to obtain a Certificate of Compliance from the Florida Department of Revenue before closing.
Sales tax on the asset sale. The one-time sale of a business’s tangible assets generally qualifies as an exempt occasional sale, except for titled motor vehicles and boats, which incur sales tax on transfer.
Documentary stamp tax on seller notes. Seller-financed promissory notes are subject to Florida doc stamps at $0.35 per $100, capped at $2,450 for unsecured notes. With 90% of buyers expecting seller financing in the current market, this is a routine closing cost.
Non-compete enforceability. Florida Statute 542.335 treats a non-compete tied to the sale of a business as presumptively reasonable for up to seven years, giving Florida buyers stronger goodwill protection than most states.
Asset sale vs. stock sale. Most Florida small-business deals are structured as asset sales so the buyer gets a stepped-up basis and avoids the seller’s liabilities. Stock sales are common only when licenses, permits, or contracts cannot be assigned.
Frequently Asked Questions
What is a typical multiple for a Florida restaurant?
Restaurants generally sell at 1.5x to 2.5x SDE, lower than the all-sector average, because of thin margins and high failure rates. Aggregate restaurant transaction values fell 16% quarter-over-quarter in Q2 2026 as buyers grew more selective.
Does Florida tax the sale of a business?
Florida has no personal income tax and no capital gains tax on individuals. Federal capital gains tax applies to the goodwill portion; depreciation recapture and ordinary income rates apply to certain assets. C-corporations pay Florida’s 5.5% corporate income tax on gains.
How long does it take to sell a small business in Florida?
The 2025 national median time to close was 170 days, roughly 5.6 months on market. Well-priced Florida service businesses often move faster.
Do I need a certified appraisal?
Not to list. You need one for SBA-financed deals above certain goodwill thresholds, for IRS purposes (gifting, estate), and for litigation such as divorce or partner disputes.
What is seller financing and does it raise the price?
It usually does. Sellers willing to carry 10–20% of the price on a note attract more buyers and can defend a higher multiple. Nearly half of sellers say they won’t offer it, which is a negotiating gap buyers exploit.
Brian’s Take
The number that sells a Florida business is not the multiple; it is the SDE. Sellers spend months arguing whether they deserve 2.8x or 3.2x when the real leverage is in a $60,000 add-back they never documented. Every dollar of provable SDE is worth roughly three dollars at closing. Clean books two years before you list, and the multiple takes care of itself.
The second thing I would tell any Florida owner: the buyer’s bank is your real counterparty. If the SBA debt-service math does not work at your asking price, no amount of broker enthusiasm will close the deal. Price to the lender, and the buyer follows.
This article is general information, not financial, tax, or legal advice. Consult a Florida-licensed broker, CPA, or attorney for your specific transaction.
Sources and Further Reading
- BizBuySell Insight Report, Q2 2026 – https://www.bizbuysell.com/insight-report/
- BizBuySell, “Business Valuation Multiples by Industry” (July 2026) – https://www.bizbuysell.com/learning-center/industry-valuation-multiples/
- BizBuySell, 2025 Fourth Quarter Insight Report – https://www.bizbuysell.com/news/bizbuysell-2025-fourth-quarter-insight-report/
- Sundance Financial, “BizBuySell’s Q2 2026 Insight Report: Three Takeaways” – https://sundancefg.com/resources/bizbuysell-q2-2026-insight-report
- My Florida Business Broker, “What We Know About Business Sales After Two Quarters of 2026” – https://www.myfloridabusinessbroker.com/what-we-know-about-business-sales-after-two-quarters-of-2026/
- CT Acquisitions, “Small Business M&A Statistics 2026” – https://ctacquisitions.com/guides/small-business-ma-statistics-2026/
- Florida Statutes § 213.758, Transfer of tax liabilities – https://www.flsenate.gov/Laws/Statutes/2023/213.758
- Florida Sales Tax Law Blog (Moffa), “Florida Sales Tax – Transferee Liability” (June 2025) – https://www.floridasalestax.com/florida-tax-law-blog/2025/june/florida-sales-tax-transferee-liability/
- Rogers Towers, “Property Buyers Can Be Held Liable for Sales and Use Taxes Owed by the Prior Owner” – https://www.rtlaw.com/property-buyers-can-be-held-liable-for-sales-and-use-taxes-owned-by-the-prior-owner/
- Florida Statutes Chapter 475 (Real Estate Brokers) and § 542.335 (Restrictive Covenants) – http://www.leg.state.fl.us/statutes/
About the Author
About Brian French
Led by a commitment to tech-intelligent curation, Brian French tracks and analyzes the Business News in Florida including corporate developments and breaking news defining Florida's economy. Brian brings an extensive financial background to his analysis, having graduated from the University of South Florida in Finance and serving as a Vice President and Portfolio Manager for Merrill Lynch Private Investors and the Trust Department in St. Petersburg, FL, as well as a Vice President and Trust Investment Officer for SunTrust Bank in Sarasota, FL. His writing blends macroeconomic trends, fiduciary capital markets, corporate strategy, and modern digital insights for a sophisticated look at Florida's business economy.
