Q1 2009 Costs to Buy a Business
How Much Is My Contra Costa Business Worth?
BizBuySell.com has just released its Contra Costa, California small business valuation trend data for First Quarter 2009.
Q1 2009 Business Valuations in Contra Costa, CA
According to statistics issued by BizBuySell.com, Contra Costa business-for-sale listings in Q1 2009 had a median asking price of $230,000.
That compares to a median ask price of $0 in . Because the median ask price for businesses for sale in Contra Costa has risen year over year, we can conclude that many smaller firms in Contra Costa are holding off on selling.
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 Contra Costa company for much less. Similarly, some Contra Costa businesses may be selling for much more.
Also, this is the asking price for a Contra Costa business. When a business owner lists a business for sale, they typically set a price that ends up being more than the eventual sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Contra Costa Businesses for Sale in the Dataset
The study data comprised 175 listings in the Contra Costa-Alameda-Solano, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Contra Costa, but they are in the area and so are probably representative of Contra Costa business valuations.
One year ago, in , the BizBuySell.com dataset for Contra Costa spanned listings. In a market where you would think fewer business owners would be selling it's a bit surprising to see more Contra Costa business-for-sale listings.
Q1 2009 Revenue Multiples In Contra Costa, CA
In the Contra Costa-Alameda-Solano, CA metro area, companies will typically sell for 0.59 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 $117,162. Remember, however, that this is only 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 $509,020 in Q1 2009.
In terms of trending year over year, the revenue multiple was 0.00 and the median revenue for listed businesses was $0.
Q1 2009 Cash Flow Multiples In Contra Costa, CA
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Contra Costa-Alameda-Solano, CA metro area was 3.22.
So, a firm with cash flows of $150,000 might have an asking price of $482,682. That calculation is dependent on the business selling for the area's average multiple. Most businesses will not conform to industry- or area averages.
If you are interested in what cash flows are for a business in Contra Costa, BizBuySell.com determined that the median cash flow for Contra Costa area businesses was $105,000 in Q1 2009. In , cash flow multiples clocked in at 0.00 and the median cash flow was $0.
Things to Consider When Selling a Business in Contra Costa, CA
Before you sell a business, you will need to recast your financials to adjust for what the business owner takes out of the business. This includes things like a high salary, car expenses and other owner perks. This useful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Contra Costa, CA Businesses
If you are contemplating buying a business or selling a business and would like to get an estimated business valuation, 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 additional information.
Historical Data for Contra Costa, CA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Contra Costa-Alameda-Solano, CA metro area for the last 9 quarters.
Here is how median revenue multiples are tracking in the Contra Costa area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Contra Costa area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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