30+ Years of Proven Expertise in Florida Business Brokerage

Business brokers typically charge a success fee (commission) ranging from 8% to 10% of the final sale price for businesses valued under $1 million. For larger or middle-market transactions, this percentage generally scales down, and brokers may utilize minimum fees

Main Street Businesses (<$2M): Usually find a qualified buyer within 4 to 9 months if priced correctly and marketed across statewide platforms like the Business Brokers of Florida (BBF) MLS.

At Enterprise Business Brokers we protect your sale's confidentiality and maintain normal operations using three core methods:

• Blind Listings: Marketing your business with anonymous profiles (e.g., "Pasco County Florida Manufacturer") that omit names, addresses, and proprietary details.

• Strict NDAs & Vetting: Requiring buyers to sign non-disclosure agreements and prove their funding before revealing your identity or financials.

• Phased Information Sharing: Releasing data gradually on a need-to-know basis, reserving highly sensitive details (like customer lists) for final due diligence.

By acting as an operational buffer, brokers ensure your staff and competitors remain unaware of the sale until it's time.

1. What is SDE? (Seller’s Discretionary Earnings)

SDE is the total financial benefit a single, full-time owner-operator takes out of the business.

It starts with the business's net profit and "adds back" expenses that a new owner wouldn't necessarily have to pay, most notably the current owner's salary and personal perks.

• Formula: Net Income + Interest + Taxes + Depreciation/Amortization + Owner's Salary & Benefits

• Best For: "Main Street" small businesses (generally under $1M–$2M in value) where the owner runs the day-to-day operations.

2. What is EBITDA? (Earnings Before Interest, Taxes, Depreciation, and Amortization)

EBITDA measures the baseline operational profitability of a company before accounting for financing, government taxes, or non-cash accounting expenses.

• Formula: Net Income + Interest + Taxes + Depreciation + Amortization

• Best For: Larger, lower-middle-market companies (over $2M+ in value) or institutional investments.

The Main Difference: The "Owner's Labor"

The fundamental difference between the two metrics comes down to how the owner’s day-to-day work is treated financially:

SDE Includes the Labor of 1 Working Owner

SDE assumes that the buyer is going to step in and physically run the business themselves as their full-time job. Therefore, the owner's salary is added back into the earnings because that money goes directly into the buyer's pocket as compensation for their daily labor.

EBITDA is Used for Absentee / Investment Businesses

EBITDA assumes the business is run by an absentee owner or managed by an executive team, rather than a hands-on owner.

• If a working owner wants to show their business's value via EBITDA, they must subtract a Market-Rate Replacement Salary to pay a general manager to handle those daily operations.

• Because a manager's salary is an ongoing operational expense, EBITDA is naturally lower than SDE for the exact same business.

In Short: SDE tells a hands-on buyer how much money they will make by working the business. EBITDA tells an investor how much money the business makes purely as a hands-off asset after paying a team to run it.

The Direct Market Data Method (often called the Market Comparable Approach) is a way to value a small business by looking at what similar businesses have actually sold for.

Think of it exactly like selling a house: a real estate agent looks at recent sales of neighboring homes with the same square footage and number of bedrooms to determine a fair listing price. In business brokerage, this method looks at transactional databases—like the state-specific Business Brokers of Florida (BBF) MLS—to see what similar businesses in the same industry and geographic region sold for relative to their revenue or earnings.

How It Works (The Simple Formula)

Instead of using complicated theoretical math, this method relies on a valuation multiple derived from real-world data:

1. Find the Financial Benchmark: For small businesses, this is almost always the Seller’s Discretionary Earnings (SDE).

2. Apply the Market Multiple: If data shows that local businesses in your specific industry (e.g., a home service business or a local medical clinic) consistently sell for an average of $2.5\times$ to $3\times$ their SDE, that range becomes your market multiple.

3. Calculate Value:

   $$\text{Business Value} = \text{Your Business's SDE} \times \text{Market Multiple}$$

Why This is the Best Option for Small, Owner-Operated Businesses

For "Main Street" businesses where the owner is hands-on, the Direct Market Data Method is widely considered the most accurate and realistic approach for three main reasons:

1. It Reflects Real Buyer Behavior

Unlike large corporate mergers based on complex 10-year future cash flow projections, small business buyers are usually individuals looking to buy a job and a steady income. This method is based entirely on what actual buyers in the current market were willing to pay for similar income streams, making the valuation highly realistic.

2. It Directly Pairs with SDE

Since owner-operated businesses rely heavily on SDE (which includes the working owner's salary and personal perks), the Direct Market Data Method is the cleanest way to value them. Most small business transactional databases report sale prices alongside the SDE, allowing for a direct, "apples-to-apples" comparison that other valuation models (like EBITDA-based corporate models) fail to capture accurately.

3. It Holds Weight with SBA Lenders

If a buyer needs an SBA loan to purchase an owner-operated business, the lender will hire an independent appraiser. These appraisers rely heavily on peer-derived market data to justify the loan amount. Using this method from the start ensures the valuation aligns perfectly with what bank underwriters look for, minimizing the risk of a deal falling through later during financing.

1. The Real-World Market Baseline

• The Market Reality: This tracks with widespread industry benchmarks showing that roughly 80% of businesses listed for sale ultimately never close a deal, often due to unrealistic pricing expectations or poor financial records.

• Individual Florida Firm Averages vs. The True Median

  • The 85%+ Elite Tier: If you look up individual prominent brokerage firms throughout Florida (specifically across major hubs like Tampa, Orlando, and Miami), you will frequently see advertised closing ratios ranging from 85% to 95%.

  • The Selective Catch: These high percentages represent the firm's private track record with highly vetted, pre-screened clients. These brokers deliberately reject "unsellable" or over-valued listings to protect their metrics.