BUSINESS VALUATION • MIAMI & MIAMI BEACH
Understand what drives your Miami business’s value.
An asking price should have a business case behind it. Let’s look at what you’re earning, how dependable it is and what transfers to the next owner.
THE SHORT ANSWER
How is a business valued for a possible sale in Miami or Florida?
A brokerage market assessment considers supported earnings, proposed adjustments, revenue quality, owner dependency, customer concentration, financial records and relevant transaction evidence where available. Annual revenue alone does not determine the sale price. The readiness score identifies preparation priorities; it does not calculate a dollar value or a valuation multiple.
A useful next step. Prepare three years of P&Ls and tax returns, recent monthly results, a balance sheet and support for proposed adjustments.
Which earnings measure fits this business?
Seller’s discretionary earnings, or SDE, is often used to discuss the owner benefit in an owner-operated business. EBITDA means earnings before interest, taxes, depreciation and amortization. They answer different questions and should not be treated as interchangeable.
The right discussion starting point depends on the size and operating structure of the company, including whether a buyer needs to hire someone to replace the owner. Adjustments need to be documented and assessed in context.
Prepare for quality of earnings diligence.
A proposed adjusted EBITDA figure needs a clear explanation and supporting records. Discuss revenue recognition, customer concentration, owner replacement costs, one-time expenses and working capital with your CPA and any independently engaged quality of earnings (QoE) team.
A brokerage market assessment and a QoE review serve different purposes. The readiness tool does neither an audit nor a QoE review. Financial diligence should be scoped and performed by the independent professionals retained for that work.
Five factors worth examining.
Two businesses with similar earnings can present very different risks to a buyer. The readiness check focuses on five practical areas. The importance of each will vary by industry and buyer.
- Earnings quality: can the books and proposed adjustments be supported?
- Recurring revenue: how much work repeats, renews or is contracted?
- Owner dependency: what happens when the owner steps away?
- Customer concentration: how much depends on one account?
- Financial readiness: are the records current, consistent and available?
What the readiness score tells you.
The tool uses your own answers to identify preparation priorities. Its weights are a simple discussion framework, not market valuation evidence or a prediction of buyer demand. An unknown answer is treated conservatively and flagged for review.
It does not estimate a dollar value, determine a multiple or replace a review of the financials. A project-based business can still be attractive; low recurring revenue needs to be understood in the context of its industry.
What happens in a valuation discussion?
We discuss the business, your goals and the financial records available. A more useful market assessment considers supported earnings alongside operations, customer relationships, buyer fit and relevant transaction evidence where available.
An initial brokerage valuation discussion is a market assessment for a possible sale. It is not a certified appraisal, tax opinion or legal opinion. The scope of any further work should be agreed before it begins.
YOUR NEXT CHAPTER
What would a sale look like for you?
Start with an initial brokerage valuation discussion. No obligation to list. Any additional work and its scope are agreed separately.