Buying a Business
Cost to Buy a Business in Jefferson County
Considering purchasing a company in Jefferson County, Indiana? Your first question will probably be "How much does it cost to buy a business in Jefferson County?"
The good news is the folks at BizBuySell.com have made some data available on what businesses are going for in Jefferson County.
BizBuySell.com is the biggest business-for-sale listings site on the Internet, offering over 50,000 businesses for sale at any given time. 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 Indiana, peruse the BizBuySell Indiana listings to see the latest business-for-sale listings for Jefferson County and other Indiana municipalities.
Business Valuations in Jefferson County, IN
Based on the BizBuySell.com data, the median asking price for an Jefferson County business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $225,000.
That was based on 73 listings in the Louisville-Jefferson County, KY-IN metro area. Many of the businesses in the dataset are outside of Jefferson County, but they are in the area and so are likely representative of Jefferson County 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 Jefferson County business for much less. At the same time, some Jefferson County businesses may cost much more.
Another thing you should know is that this is the asking price for an Jefferson County business. Typically, when an owner lists a company for sale, they start with an asking price that is higher than the final 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 Louisville-Jefferson County, KY-IN metro area for the last 8 quarters.
Revenue Multiples In Jefferson County, IN
In the Louisville-Jefferson County, KY-IN metro area, businesses will usually sell for 0.83 times the selling company's revenues. This 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 $166,911. 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.
Here is how median revenue multiples are trending in the Jefferson County area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $400,000 in Q4 2008.
Cash Flow Multiples In Jefferson County, IN
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 Louisville-Jefferson County, KY-IN metro area was 3.97.
So, a firm with cash flows of $120,000 might have an asking price of $476,256. That's if the business fits the area average. The distribution on revenue multiples for a given set of businesses can be quite wide-ranging.
Here is how cash flow multiples are trending in the Jefferson County area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Jefferson County, BizBuySell.com reports that the median cash flow for Jefferson County area businesses was $75,000 in Q4 2008.
Things to Consider When Buying a Business in Jefferson County, IN
Never underestimate what it will take to be a successful entrepreneur. It's important to understand that owners work long hours, and, in many casees, it can take a while before a business generates sufficient cash flow to pay the owner well. This useful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Jefferson County, IN 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 additional information.
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