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Florida Business Sales

Florida Business Sales in 2020 Compared to 2019

2019 was a very robust year for business sales in Florida. In fact, over the past several years, we’ve seen nothing but a healthy and growing market for small business sales here, as more and more people flock to the Sunshine State. In 2020, with the arrival of COVID-19, undoubtedly, we saw some changes to the sales trends and our marketplace. For all of the “numbers people” out there, here is a statistical breakdown of how 2020 compared to 2019 for Florida business sales. Florida-specific numbers were sourced from the Business Brokers of Florida sold business database, and national numbers are from BizBuySell.

Number of Businesses Sold

In 2019, we saw 1,315 businesses change hands in Florida, and then in 2020 there were only 1,011 sold. That is a decrease of about 23%. According to BizBuySell’s Insight Report for 2020, nationally, the number of businesses sales dropped 22% from 2019 to 2020, so Florida’s numbers are in line with the rest of the country. 

Roughly about 1/4 of our annual business sales are in the bar and restaurant industry. It is no secret that the hospitality industry has taken a huge blow in 2020, and many restaurants were forced to close their doors, when they otherwise might have sold under normal circumstances. The number of financially healthy restaurants on the market has also dipped dramatically as well. Inventory is down about 25% here in Florida, and one can reasonably surmise that restaurants account for much of the missing inventory numbers. It is not a big leap to make the conclusion that restaurants, which are normally a big percentage of business sales, most likely account for the majority of the 22% drop in overall sales in Florida and the 23% drop nationally in 2020.  


Average Sold Price

For sold Florida businesses, the average sold price in 2019 was $444,658 as compared to the average for 2020 at $402,636. At a glance, this appears to be about a 10% decrease in the average; however, we need to look at 2020 in two distinct parts to see the true story of what has happened. In the first half of 2020, the average sold price dropped to $308,337. This is not surprising at all, as the first half of 2020 the economy was in shock, recovering from the recent lockdowns, and the uncertainty that March and April brought to all of us. 

As things started to open back up and businesses began to adapt to COVID, we saw record numbers for business sales in the second half of 2020. In fact, the average sold price rose dramatically to $496,935 which is a 38% surge from the first half of 2020 and over a 10% increase from 2019. Nationally, the median sales price rose by 12% to $279,950. Just comparing the dollar amounts too, the national median sales price is much lower than the average in Florida. This tells us that we still have quite a healthy business sales market, and in-fact, in 2020, Florida businesses sold at prices that were over 30% higher than the national average. 


Average Owner Benefit

Of course, we cannot look at sold prices without examining the average owner benefit or cash flow numbers that relate directly to those prices. Businesses are valued and priced based on a multiple of the owner benefit or seller’s discretionary earnings, so what we have found is exactly what we would expect to see: the owner benefit average changes have directly influenced the changes in sold prices.

In 2019, Florida saw an average owner benefit for sold businesses of $165,204. In 2020, the annual average saw a decrease of about 10%, which is exactly the same as the decrease in the average sold price. The 2020 average owner benefit for sold businesses was only $149,185. However, when we look at the last 6 months of 2020, sold Florida businesses had a higher owner benefit at $166,422 than in 2019 ($165,204), which again echoes in the sales prices, as described above. 

How does Florida compare to the national numbers here? According to BizBuySell, the median cash flow of sold businesses increased 10.7% in 2020 to $135,567. Even with an increase, the national number is still much lower than the average numbers for Florida. It is interesting to see that the average sold Florida business is making more owner benefit than businesses nation-wide. That definitely supports reasoning for the higher purchase prices we see in Florida.



From these numbers, especially when comparing Florida’s statistics to the national numbers, we can conclude that the businesses that changed hands in Florida, not only are making more money, but they are selling at higher purchase prices. That makes it very advantageous for sellers in this current market. Healthy businesses are selling at record prices, and we are only seeing this trend continue into 2021.