Buying a Business
Cost to Buy a Business in Bloomington
Considering purchasing a company in Bloomington, Minnesota? Your first question will probably be "How much does it cost to buy a business in Bloomington?"
Luckily, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Bloomington.
BizBuySell.com is the biggest business-for-sale listings site on the Internet, offering over 50,000 businesses for sale at any given time. When a business broker in a local city has a listing, the broker will typically post it on BizBuySell.com. They also have many FSBO (for sale by owner) business-for-sale listings.
If you want to buy a company in Minnesota, check out the BizBuySell Minnesota listings to see the latest business-for-sale listings for Bloomington and other Minnesota municipalities.
Business Valuations in Bloomington, MN
According to BizBuySell.com, the median asking price for an Bloomington business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $300,000.
That was based on 291 listings in the Minneapolis-St. Paul-Bloomington, MN-WI metro area. Many of the businesses in the dataset are outside of Bloomington, but they are in the area and so are likely representative of Bloomington 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 Bloomington business for much less. At the same time, some Bloomington businesses may cost much more.
Another thing you should know is that this is the asking price for an Bloomington business. Typically, when a business owner lists a business for sale, they start with an asking price that is higher than the contracted sale price. The sale-price-to-asking-price ratios depend on deal specifics 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 Minneapolis-St. Paul-Bloomington, MN-WI metro area for the last 8 quarters.
Revenue Multiples In Bloomington, MN
In the Minneapolis-St. Paul-Bloomington, MN-WI metro area, businesses will usually sell for 0.91 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 business that has revenues of $200,000 might list for $181,979. Keep in mind that this is in fact an average for revenue multiples in Bloomington and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Bloomington area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $402,000 in Q4 2008.
Cash Flow Multiples In Bloomington, MN
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Minneapolis-St. Paul-Bloomington, MN-WI metro area was 4.37.
So, a business with cash flows of $120,000 might have an asking price of $523,808. That math only works if the business sells for the area's average multiple. Actual cash flow multiples can vary considerably from one business to another.
The table below shows how cash flow multiples are trending in the Bloomington area, based on BizBuySell.com's quarterly reports.
Flow Multiple
In case you were wondering what typical cash flows are for a business in Bloomington, BizBuySell.com reports that the median cash flow for Bloomington area businesses was $85,000 in Q4 2008.
Tips for Bloomington, MN Business Buyers
If you are looking to buy a business, be sure to contact business intermediaries who represent selling businesses within your targeted market. They will notify you of available companies that meet your criteria and qualifications. Most business brokers or intermediaries work for the seller and are paid by the seller. That means you can enjoy the luxury of their services at no cost. This helpful advice was provided by Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Bloomington, MN Businesses
If you have a specific business in mind and want to look at comparables in the area, 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 published on a quarterly basis. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for more information.
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