Buying a Business
Cost to Buy a Business in Hartford
If you want to buy a business in Hartford, Connecticut, you're no doubt wondering how much a typical Hartford, Connecticut business costs to buy.
Fortunately, the team at BizBuySell.com has made some data available on what businesses are going for in Hartford.
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 Connecticut, take a look at the BizBuySell Connecticut listings to see the latest business-for-sale listings for Hartford and other Connecticut towns.
Business Valuations in Hartford, CT
According to BizBuySell.com, the median asking price for an Hartford business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $179,500.
That was based on 206 listings in the Hartford-West Hartford-East Hartford, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of Hartford, but they are in the area and so are probably representative of Hartford 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 Hartford business for much less. At the same time, some Hartford businesses may cost much more.
Importantly, this is the asking price for an Hartford business. Typically, when a small 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 Hartford-West Hartford-East Hartford, CT metro area for the last 8 quarters.
Revenue Multiples In Hartford, CT
In the Hartford-West Hartford-East Hartford, CT metro area, businesses will typically sell for 0.61 times the selling company's revenues. That was 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 $121,238. Remember, however, that this is only an average for revenue multiples in Hartford and surrounding communities. Some businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Hartford area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $396,000 in Q4 2008.
Cash Flow Multiples In Hartford, CT
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 Hartford-West Hartford-East Hartford, CT metro area was 2.74.
So, a business with cash flows of $120,000 might have an asking price of $328,853. That's if the business fits the area average. Cash flow multiples can vary considerably based on many factors.
Here is how cash flow multiples are trending in the Hartford area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Hartford, BizBuySell.com reports that the median cash flow for Hartford area businesses was $92,673 in Q4 2008.
Things to Consider When Buying a Business in Hartford, CT
When buying a business, it's often a good idea to have the previous owner stay on for a transition period after you buy the business. This can range from a couple of weeks to several months. The goal is to make sure you are well-trained on how to run the business and that you minimize any revenue or customer attrition. Most sellers are willing to do this. After all, they want to see their company continue to do well even after they are no longer involved in the business. This advice on how to structure a business purchase comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Hartford, CT Businesses
If you have a specific business in mind and want to value the business, 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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