Buying a Business
Cost to Buy a Business in Joliet
If you want to buy a business in Joliet, Illinois, you're no doubt wondering how much a typical Joliet, Illinois business costs to buy.
Fortunately, the team at BizBuySell.com has made some data available on what it costs to buy a business in Joliet.
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. They also have many FSBO (for sale by owner) business-for-sale listings.
If you want to buy a company in Illinois, check out the BizBuySell Illinois listings to see the latest business-for-sale listings for Joliet and other Illinois cities.
Business Valuations in Joliet, IL
Based on the BizBuySell.com data, the median asking price for an Joliet business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $275,000.
That was based on 580 listings in the Chicago-Naperville-Joliet, IL-IN-WI metro area. Many of the businesses in the dataset are outside of Joliet, but they are close by and so are probably representative of Joliet 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 Joliet business for much less. At the same time, some Joliet businesses may cost much more.
Another thing you should know is that this is the asking price for an Joliet business. Typically, when a business owner lists a business 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 companies in the Chicago-Naperville-Joliet, IL-IN-WI metro area for the last 8 quarters.
Revenue Multiples In Joliet, IL
In the Chicago-Naperville-Joliet, IL-IN-WI metro area, small businesses will typically sell for 0.80 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this part of the country.
In other words, a business that has revenues of $200,000 might list for $159,279. Remember, however, that this is just an average for revenue multiples in the area. Some small businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Joliet area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $443,836 in Q4 2008.
Cash Flow Multiples In Joliet, IL
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 Chicago-Naperville-Joliet, IL-IN-WI metro area was 3.23.
So, a company with cash flows of $120,000 might have an asking price of $388,092. That math only works if the business sells for the area's average multiple. Most businesses will not conform to industry- or area averages.
Here is how cash flow multiples are trending in the Joliet area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Joliet, BizBuySell.com determined that the median cash flow for Joliet area businesses was $99,885 in Q4 2008.
Tips for Joliet, IL Business Buyers
If you are interested in buying an existing business, you want the business broker you are working with to be selling you to the seller. As such, it's important that you demonstrate that you're a qualified, motivated buyer. Being prepared and serious about your search is an important initial step. This advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Joliet, IL 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 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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