Miami Business Valuation: What Multiples Really Mean

A national "3x EBITDA" rule of thumb is useless in Miami. A Brickell restaurant with $1M revenue trades at a different multiple than a Doral medical practice with the same revenue. Location, industry, customer concentration, and Florida-specific regulatory risk all shift the numbers. Here's what we see in actual 2025-2026 South Florida transactions.

How Multiples Work (And Don't Work)

A "multiple" is simply: Purchase Price ÷ Earnings Metric. The two most common earnings metrics are:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) — used for businesses with $1M+ earnings, larger transactions, and when the buyer is a company or PE firm
• SDE (Seller's Discretionary Earnings) — used for smaller businesses, owner-operated deals, and when the buyer is an individual who will replace the seller's role

The same business can have a 2.5x EBITDA multiple and a 3.5x SDE multiple — both are "correct" depending on which metric you use. When comparing listings, always verify which metric the seller is using. A broker quoting "3x" without specifying EBITDA or SDE is either sloppy or intentionally opaque.

Miami-Specific Multiples by Industry (2025-2026)

These ranges are based on closed transactions in Miami-Dade, Broward, and Palm Beach counties. National data from BizBuySell or DealStats is included for comparison to show the Miami premium (or discount).

What Adjusts the Multiple Up or Down

Within each industry range, specific factors move the needle:

Multiple Expansion Factors (+0.5x to +1.5x)

• Recurring revenue > 40% of total (subscriptions, maintenance contracts, retainers)
• Revenue concentration — no single customer > 15%
• Management team in place (owner works < 30 hours/week)
• Clean financials (audited or reviewed by CPA, no commingling)
• Long-term lease with favorable terms (> 5 years remaining, below-market rent)
• Growth trajectory (3-year revenue CAGR > 15%)
• Proprietary assets (brand, IP, exclusive supplier relationships)

Multiple Compression Factors (-0.5x to -1.5x)

• Customer concentration (one customer > 30% of revenue)
• Owner dependency (owner is the primary salesperson, technician, or relationship holder)
• Declining revenue or margin compression over 2+ years
• Lease expiring < 3 years with market-rate renewal expected
• Regulatory risk (licensing dependent on specific individual, industry under scrutiny)
• Competitive threat (new competitor opening nearby, Amazon/e-commerce pressure)
• Financial opacity (cash-heavy business, no POS system, undocumented revenue)

The "Miami Premium" Explained

Miami businesses trade at 0.3-0.7x higher multiples than national averages in several categories. Here's why:

• Population growth velocity — 2.1% annual vs. 0.4% national. More customers entering the market than leaving.
• Wealth migration — New residents have higher disposable income than the national average. A Miami dental patient is more likely to pay out-of-pocket for cosmetic work than a Cleveland patient.
• International capital — Latin American buyers view Miami businesses as safe-harbor assets, increasing demand and exit optionality.
• Tax advantage — No state income tax means the same EBITDA generates more after-tax cash flow for the owner. Buyers price this in.
• Limited supply — Commercial space constraints (zoning, NIMBYism, water management) limit new competitor entry, protecting existing business margins.

Using the 305business Valuation Calculator

Our free valuation tool at 305business.llc/valuation applies these Miami-specific multiples to your inputs. It automatically adjusts for:

• Industry category (12 Miami-specific sectors)
• Revenue and SDE/EBITDA input
• Recurring revenue percentage
• Customer concentration
• Owner hours per week
• Lease term remaining
• Growth rate (3-year trend)

The output is a valuation range, not a single number. Use the low end for conservative planning and the high end for negotiation positioning.

Bottom Line

Valuation is part science, part art, part negotiation. The multiples above are starting points, not gospel. A motivated seller facing health issues may accept 20% below market. A seller with multiple offers may hold out for 15% above. Your job as a buyer is to know the range cold, identify where the specific business falls within it, and negotiate from a position of data confidence.

In Miami's 2026 market, the biggest mistake we see is buyers using national data from BizBuySell and offering 2.2x on a dental practice that trades at 4.0x locally. The offer gets rejected immediately, and the buyer loses credibility. Use local data. Use current data. Know your multiples before you make your first offer.