Buying a Business

Cost to Buy a Business in Schenectady

Considering purchasing a company in Schenectady, New York? You're no doubt wondering how much a typical Schenectady, New York business costs to buy.

Fortunately, a company called BizBuySell.com has made some data available on what it costs to buy a business in Schenectady.

BizBuySell.com is the largest online marketplace for business-for-sale transactions. The vast majority of business brokers in the country put their business listings on BizBuySell.com. In addition, many business owners who are selling on their own, without a broker, will place listings on BizBuySell.com.

If you are looking to buy a business in New York, check out the BizBuySell New York listings to see the latest business-for-sale listings for Schenectady and other New York municipalities.

Business Valuations in Schenectady, NY

Based on the BizBuySell.com data, the median asking price for an Schenectady business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $495,000.

That was based on 70 listings in the Albany-Schenectady-Troy, NY metro area. As such, some of the businesses used to derive the median valuation might be outside of Schenectady, but they are close by and so are likely representative of Schenectady business valuations.

Note that this is the median asking price for a business. If you are in the market to buy a company, you may be able to buy an Schenectady business for much less. At the same time, some Schenectady businesses may cost much more.

Importantly, this is the asking price for an Schenectady business. Typically, when an entrepreneur lists a company for sale, they start with an asking price that is higher than the contracted sale price. The sale-price-to-asking-price ratios depend on deal specifics but typically might be between 0.85 and 0.90. As an example, a company listed for $275,000 might sell for between $233,750 and $247,500.

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Albany-Schenectady-Troy, NY metro area for the last 8 quarters.

Quarter
Median Ask
Q1 2007
$399,000
Q2 2007
$450,000
Q3 2007
$499,000
Q4 2007
$524,500
Q1 2008
$479,000
Q2 2008
$499,000
Q3 2008
$496,500
Q4 2008
$495,000

Revenue Multiples In Schenectady, NY

In the Albany-Schenectady-Troy, NY metro area, companies will usually sell for 2.02 times the selling company's revenues. The data indicates that is the mean revenue multiple for Q4 2008 in this area of the country.

In other words, a business that has revenues of $200,000 might list for $404,806. Remember, however, that this is only an average for revenue multiples in the area. Some entities will have higher revenue multiples and others will have lower revenue multiples.

Here is how median revenue multiples are tracking in the Schenectady area, based on BizBuySell.com's quarterly reports.

Quarter
Revenue Multiple
Q1 2007
1.70
Q2 2007
2.14
Q3 2007
1.86
Q4 2007
1.88
Q1 2008
1.90
Q2 2008
1.85
Q3 2008
1.86
Q4 2008
2.02

According to BizBuySell.com, the median revenues for its business-for-sale listings was $453,000 in Q4 2008.

Cash Flow Multiples In Schenectady, NY

Another popular way to value a business is through cash flow multiples.

For Q4 2008, the average cash flow multiple for businesses listed in the Albany-Schenectady-Troy, NY metro area was 4.94.

So, a company with cash flows of $120,000 might have an asking price of $592,955. That's if the business fits the area average. Actual cash flow multiples are based on business specifics.

The table below shows how cash flow multiples are trending in the Schenectady area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
3.49
Q2 2007
4.46
Q3 2007
4.27
Q4 2007
4.21
Q1 2008
4.30
Q2 2008
4.34
Q3 2008
4.29
Q4 2008
4.94

In case you were wondering what typical cash flows are for a business in Schenectady, BizBuySell.com reports that the median cash flow for Schenectady area businesses was $133,757 in Q4 2008.

Things to Consider When Buying a Business in Schenectady, NY

If you are interested in buying an existing business, you want the business broker you are working with to be selling you to the seller. As such, it's important that you demonstrate that you're a qualified, motivated buyer. Being prepared and serious about your search is an important initial step. This advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Schenectady, NY Businesses

If you have a specific business in mind and want to find out how much a business is worth, we recommend the BizBuySell.com Business Valuation Tool. You can refine the dataset that generates business valuations to meet your specific needs, and access to the tool is very affordable -- less than $100.

More Information on BizBuySell.com's Quarterly Reports

The BizBuySell Insight Report is a nationally-recognized economic indicator that tracks the health of the U.S. small business economy. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for more information.

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