Buying a Business
Cost to Buy a Business in Towson
Considering purchasing a company in Towson, Maryland? You're no doubt wondering how much a typical Towson, Maryland business costs to buy.
The good news is the folks at BizBuySell.com have made some data available on what businesses are going for in Towson.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. Their listings include almost all of the available listings from business brokers nationwide. In addition, many business owners who are selling on their own, without a broker, will place listings on BizBuySell.com.
If you want to buy a company in Maryland, check out the BizBuySell Maryland listings to see the latest business-for-sale listings for Towson and other Maryland towns.
Towson, MD Business Valuations
According to BizBuySell.com, the median asking price for an Towson business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $225,000.
That was based on 296 listings in the Baltimore-Towson, MD metro area. As such, some of the businesses used to derive the median valuation might be outside of Towson, but they are in the area and so are probably representative of Towson business valuations.
Remember 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 Towson business for much less. The flip side is that some Towson businesses may cost much more.
Another thing you should know is that this is the asking price for an Towson business. Typically, when an entrepreneur lists a business for sale, they start with an asking price that is higher than the eventual sale price. The sale-price-to-asking-price ratio varies considerably but typically might be between 0.85 and 0.90. In other words, a business listed for $100,000 might sell for between $85,000 and $90,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses for sale in the Baltimore-Towson, MD metro area for the last 8 quarters.
Revenue Multiples In Towson, MD
In the Baltimore-Towson, MD metro area, companies will typically sell for 0.75 times the selling company's revenues. That was 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 $150,276. Remember, however, that this is in fact an average for revenue multiples in Towson and surrounding communities. Some entities will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Towson area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $404,496 in Q4 2008.
Cash Flow Multiples In Towson, MD
Another popular way to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Baltimore-Towson, MD metro area was 3.08.
So, a company with cash flows of $120,000 might have an asking price of $369,937. That's if the business fits the area average. Most businesses will not conform to industry- or area averages.
The table below shows how cash flow multiples are trending in the Towson area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Towson, BizBuySell.com reports that the median cash flow for Towson area businesses was $90,000 in Q4 2008.
Tips for Towson, MD Business Buyers
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 Towson, MD Businesses
If you have a specific business in mind and want to value the business, 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 additional information.
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