Q1 2009 Costs to Buy a Business
How Much Is My Providence Business Worth?
We just received the latest Providence, Rhode Island business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Providence, RI
According to statistics issued by BizBuySell.com, Providence business-for-sale listings in Q1 2009 had a median asking price of $179,000.
That compares to a median ask price of $165,000 in Q1 2008. Because the median ask price for businesses for sale in Providence has risen year over year, we can conclude that many smaller firms in Providence 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 Providence company for much less. However, some Providence businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Providence business. When a small 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 depends on deal specifics. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Providence Businesses for Sale in the Dataset
The study data comprised 201 listings in the Providence-New Bedford-Fall River, RI-MA metro area. As such, some of the businesses used to derive the median valuation might be outside of Providence, but they are nearby and so are probably representative of Providence business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Providence spanned 252 listings. The downward trend in the number of Providence business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Providence, RI
In the Providence-New Bedford-Fall River, RI-MA metro area, businesses will typically sell for 0.70 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 business that has revenues of $200,000 might list for $139,779. Remember, however, that this is just an average for revenue multiples in the area. Some companies 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 $365,000 in Q1 2009.
In terms of trending year over year, the Q1 2008 revenue multiple was 0.80 and the median revenue for listed businesses was $327,500.
Q1 2009 Cash Flow Multiples In Providence, RI
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Providence-New Bedford-Fall River, RI-MA metro area was 3.14.
So, a company with cash flows of $150,000 might have an asking price of $471,136. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
In case you were wondering what typical cash flows are for a business in Providence, BizBuySell.com reports that the median cash flow for Providence area businesses was $84,170 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.22 and the median cash flow was $75,166.
Tips for Providence, RI 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 Providence, RI Businesses
If you are contemplating buying a business or selling a business and would like to find out how much a business is worth, 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 a nationally-recognized economic report that tracks trends in the business-for-sale marketplace. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.
Historical Data for Providence, RI Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Providence-New Bedford-Fall River, RI-MA metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Providence area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Providence area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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