Selling a business is one of the most important financial decisions an owner will ever make. Yet for many entrepreneurs, the process feels mysterious—almost like trying to price a house without knowing the neighborhood, the comps, or even the square footage.
In a recent video, Michael Shea of Tampa Transworld Business Advisors breaks down the question every owner eventually asks: “How much can I sell my business for?” His explanation is refreshingly straightforward, cutting through the noise and giving business owners a clear framework for understanding valuation.
Below is a deeper look at the core ideas Michael shares—and why they matter for anyone thinking about selling a business.
The Heart of Valuation: Your Earnings
At the center of any business valuation is one key metric: Seller’s Discretionary Earnings (SDE). This number represents the true financial benefit an owner receives from the business, including:
- Net profit
- Owner’s salary
- Perks and discretionary expenses
- One‑time or non‑recurring costs
Buyers want to know what the business really earns for the person running it. SDE gives them that picture.
Michael emphasizes that your business will sell for a multiple of SDE, and that multiple depends on several factors—industry, size, risk, documentation, and market demand.
Multiples: Where the Market Speaks
Most small businesses sell for 2–3× SDE, though some industries command higher multiples. What affects the number?
- Clean financials
- Stable or growing revenue
- Strong customer base
- Owner not being the business
- Good books and records
Michael often reminds sellers that buyers pay for transferable value. If the business depends entirely on the owner, the multiple drops. If it runs smoothly with systems, staff, and documented processes, the multiple rises.
Why Documentation Is Everything
One of the biggest takeaways from Michael’s guidance is this: If you can’t prove it, you can’t sell it.
Business owners sometimes underestimate how much buyers rely on documentation. Tax returns, P&Ls, balance sheets, and clean bookkeeping aren’t just formalities—they’re the foundation of trust.
Michael’s team at Tampa Transworld helps owners prepare these materials so buyers can confidently evaluate the opportunity.
The Market Sets the Price—Not Emotion
Many owners have an emotional connection to their business. They’ve built it, sacrificed for it, and poured years of effort into it. But as Michael explains, buyers don’t pay for emotion—they pay for earnings and opportunity.
A business is worth what the market is willing to pay, based on:
- Risk
- Return
- Comparables
- Financing options
- Industry trends
This is why working with an experienced broker matters. They understand the market, the buyers, and the data behind real valuations.
Why Talk to a Professional Early
Michael encourages owners to start the valuation conversation long before they’re ready to sell. Early planning helps owners:
- Increase their SDE
- Clean up financials
- Reduce owner dependency
- Improve systems
- Maximize their eventual sale price
A valuation isn’t just a number—it’s a roadmap.
Final Thoughts
Michael Shea’s message is clear: Your business is likely worth more than you think—but only if you understand how valuation works.
By focusing on earnings, documentation, and transferable value, business owners can position themselves for a successful and profitable exit. And with Tampa Transworld’s expertise, sellers gain a trusted partner who knows how to navigate the process from valuation to closing.
If you’re considering selling—or simply want to understand what your business might be worth—Michael’s insights are the perfect place to start.
Michael Shea represents the Tampa Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 450 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential.