Q1 2009 Costs to Buy a Business
How Much Is My Tacoma Business Worth?
We just received the latest Tacoma, Washington business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Tacoma, WA
According to statistics issued by BizBuySell.com, Tacoma business-for-sale listings in Q1 2009 had a median asking price of $249,725.
That compares to a median ask price of $225,000 in Q1 2008. Since the median ask price for businesses for sale in Tacoma has gone up year over year, we can conclude that many smaller businesses in Tacoma are putting off selling.
To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Tacoma company for much less. However, some Tacoma businesses may be selling for much more.
Also, this is the asking price for a Tacoma business. When an 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. Based on this metric, a business initially priced at $225,000 might sell for between $191,250 and $202,500.
Number of Tacoma Businesses for Sale in the Dataset
The study data comprised 300 listings in the Seattle-Tacoma-Bellevue, WA metro area. As such, some of the businesses used to derive the median valuation might be outside of Tacoma, but they are in the area and so are likely representative of Tacoma business valuations.
In Q1 2008, just one year ago, there were 334 Tacoma listings in the BizBuySell.com dataset. As a result of the recession, fewer Tacoma business owners are selling because they hope to weather the storm and sell after the economy turns around.
Q1 2009 Revenue Multiples In Tacoma, WA
In the Seattle-Tacoma-Bellevue, WA metro area, businesses will typically sell for 0.73 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this part of the country.
In other words, a business that has revenues of $200,000 might list for $145,903. Remember, however, 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 $450,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.78 and the median revenue for listed businesses was $393,790.
Q1 2009 Cash Flow Multiples In Tacoma, WA
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Seattle-Tacoma-Bellevue, WA metro area was 3.36.
So, a firm with cash flows of $150,000 might have an asking price of $504,535. 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 Tacoma, BizBuySell.com found that the median cash flow for Tacoma area businesses was $99,947 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.24 and the median cash flow was $92,330.
Things to Consider When Selling a Business in Tacoma, WA
Competitors tend to pay less for a business than strategic buyers. In most cases, selling out to a competitor should be your exit strategy of last resort (although selling to an employee may get an even lower exit price). This good advice comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Tacoma, WA 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 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 Tacoma, WA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Seattle-Tacoma-Bellevue, WA metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Tacoma area, based on BizBuySell.com's economic data.
The table below shows how cash flow multiples are trending in the Tacoma area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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