Buying a Business
Cost to Buy a Business in Fall River
Considering purchasing a company in Fall River, Massachusetts? Your first question will probably be "How much does it cost to buy a business in Fall River?"
Fortunately, a company called BizBuySell.com has made some data available on what it costs to buy a business in Fall River.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. Their listings include almost all of the available listings from business brokers nationwide. 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 Massachusetts, peruse the BizBuySell Massachusetts listings to see the latest business-for-sale listings for Fall River and other Massachusetts towns.
Business Valuations in Fall River, MA
Based on the BizBuySell.com data, the median asking price for an Fall River business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $165,000.
That was based on 262 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 Fall River, but they are in the area and so are probably representative of Fall River business valuations.
Note 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 Fall River business for much less. At the same time, some Fall River businesses may cost much more.
Another thing you should know is that this is the asking price for an Fall River business. Typically, when a business owner lists a company 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. As an example, a company listed for $275,000 might sell for between $233,750 and $247,500.
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 8 quarters.
Fall River, MA Revenue Multiples
In the Providence-New Bedford-Fall River, RI-MA metro area, companies will usually sell for 0.74 times the selling company's revenues. The data indicates that is the mean revenue multiple for Q4 2008 in this metro area.
In other words, a business that has revenues of $200,000 might list for $147,135. 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.
Here is how median revenue multiples are changing in the Fall River area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $343,436 in Q4 2008.
Cash Flow Multiples In Fall River, MA
Another useful technique to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Providence-New Bedford-Fall River, RI-MA metro area was 3.16.
So, a business with cash flows of $120,000 might have an asking price of $378,696. 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 Fall River area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Fall River, BizBuySell.com found that the median cash flow for Fall River area businesses was $76,581 in Q4 2008.
Tips for Fall River, MA 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 Fall River, MA 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 additional information.
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