Buying a Business
Cost to Buy a Business in Albany
Planning on buying a Albany, New York business? You'd do well to learn a little bit about trends in Albany, New York business valuations.
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Albany.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. The vast majority of business brokers in the country put their business listings on BizBuySell.com. In addition, many business owners who are selling on their own, without a broker, will place listings on BizBuySell.com.
If you are looking to buy a business in New York, check out the BizBuySell New York listings to see the latest business-for-sale listings for Albany and other New York cities.
Business Valuations in Albany, NY
According to BizBuySell.com, the median asking price for an Albany business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $495,000.
That was based on 70 listings in the Albany-Schenectady-Troy, NY metro area. Many of the businesses in the dataset are outside of Albany, but they are close by and so are probably representative of Albany 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 Albany business for much less. At the same time, some Albany businesses may cost much more.
Another thing you should know is that this is the asking price for an Albany business. Typically, when a business owner 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 in the Albany-Schenectady-Troy, NY metro area for the last 8 quarters.
Albany, NY Revenue Multiples
In the Albany-Schenectady-Troy, NY metro area, companies will typically sell for 2.02 times the selling company's revenues. The data indicates that is the mean revenue multiple for Q4 2008 in this area of the country.
In other words, a firm with revenues of $200,000 might list for $404,806. Keep in mind that this is strictly an average for revenue multiples in the area. Some entities will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Albany area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $453,000 in Q4 2008.
Cash Flow Multiples In Albany, NY
Another popular way to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the Albany-Schenectady-Troy, NY metro area was 4.94.
So, a business with cash flows of $120,000 might have an asking price of $592,955. 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 Albany area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Albany, BizBuySell.com reports that the median cash flow for Albany area businesses was $133,757 in Q4 2008.
Things to Consider When Buying a Business in Albany, NY
Once you have a business that you would like to buy, it may be time to bring in your attorney. However, refrain from spending lots of money on legal documentation until you are certain you are going to buy the business. Many buyers spend money on legal fees before they are committed to buying a coompany...that's a mistake you'll want to avoid. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Albany, NY Businesses
If you have a specific business in mind and want to find out how much a business is worth, 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 more information.
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