Q1 2009 Costs to Buy a Business
How Much Is My Aurora Business Worth?
We just received the latest Aurora, Colorado business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Aurora, CO
According to statistics issued by BizBuySell.com, Aurora business-for-sale listings in Q1 2009 had a median asking price of $250,000.
That compares to a median ask price of $250,000 in Q1 2008. In spite of the difficult economy, Aurora, CO business valuations appear to be relatively stable.
Please understand that this is the median asking price for a business. If you want to buy a business, you may be able to buy a Aurora company for much less. However, some Aurora businesses may be selling for much more.
Also, this is the asking price for a Aurora business. When a business owner lists a business for sale, they typically set a price that ends up being more than the ultimate sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it depends on deal specifics. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Aurora Businesses for Sale in the Dataset
The study data comprised 342 listings in the Denver-Aurora, CO metro area. As such, some of the businesses used to derive the median valuation might be outside of Aurora, but they are close by and so are probably representative of Aurora business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Aurora spanned 401 listings. The downward trend in the number of Aurora business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Aurora, CO
In the Denver-Aurora, CO metro area, businesses will typically sell for 0.79 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this area of the country.
In other words, a firm with revenues of $200,000 might list for $158,478. Keep in mind that this is just an average for revenue multiples in the area. Some firms will have higher revenue multiples and others will have lower revenue multiples.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $400,000 in Q1 2009.
In terms of trending year over year, the Q1 2008 revenue multiple was 0.88 and the median revenue for listed businesses was $382,060.
Q1 2009 Cash Flow Multiples In Aurora, CO
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Denver-Aurora, CO metro area was 3.18.
So, a firm with cash flows of $150,000 might have an asking price of $477,264. That's only if the firm complies with the local average. In practice, cash flow multiples can vary considerably from one business to another.
In case you were wondering what typical cash flows are for a business in Aurora, BizBuySell.com reports that the median cash flow for Aurora area businesses was $90,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.29 and the median cash flow was $91,048.
Tips for Aurora, CO Business Sellers
Buyers pay more for certainty than for uncertainty, especially when it comes to future cash flows. So, think about ways to lock in future cash flows for a prospective buyer and, if it can be done, you'll then be able to command a higher sale price for your business. This useful tip for selling a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Aurora, CO Businesses
If you are contemplating buying a business or selling a business and would like to look at comparables in the area, we suggest you try the BizBuySell.com Business Valuation Tool. You can modify the dataset that creates business valuation estimates to meet your specific criteria. As a bonus, access to the tool is very affordable -- less than $100.
More Information on BizBuySell.com's Quarterly Reports
The BizBuySell Insight Report is published every quarter. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.
Historical Data for Aurora, CO Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses for sale in the Denver-Aurora, CO metro area for the last 9 quarters.
Here is how median revenue multiples are moving in the Aurora area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Aurora area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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