Buying a Business
Cost to Buy a Business in Milford
Considering purchasing a company in Milford, Connecticut? You'd do well to learn a little bit about trends in Milford, Connecticut business valuations.
Fortunately, the folks at BizBuySell.com have made some data available on what businesses are going for in Milford.
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, check out the BizBuySell Connecticut listings to to be on the inside track with the newest business-for-sale listings for Milford and other Connecticut municipalities.
Business Valuations in Milford, CT
According to BizBuySell.com, the median asking price for an Milford business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $175,000.
That was based on 117 listings in the New Haven-Milford, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of Milford, but they are nearby and so are probably representative of Milford 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 Milford business for much less. At the same time, some Milford businesses may cost much more.
Another thing you should know is that this is the asking price for an Milford 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 New Haven-Milford, CT metro area for the last 8 quarters.
Revenue Multiples In Milford, CT
In the New Haven-Milford, CT metro area, companies will typically sell for 0.70 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 $140,273. Remember, however, that this is just an average for revenue multiples in Milford and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are tracking in the Milford area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $330,000 in Q4 2008.
Cash Flow Multiples In Milford, CT
Another popular way to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the New Haven-Milford, CT metro area was 2.84.
So, a business with cash flows of $120,000 might have an asking price of $341,200. 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 Milford area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Milford, BizBuySell.com reports that the median cash flow for Milford area businesses was $81,000 in Q4 2008.
Things to Consider When Buying a Business in Milford, CT
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 Milford, CT Businesses
If you have a specific business in mind and want to get a ballpark business valuation, 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.
Share this article
Additional Resources for Entrepreneurs