Buying a Business
Cost to Buy a Business in Minneapolis
If you want to buy a business in Minneapolis, Minnesota, you're no doubt wondering how much a typical Minneapolis, Minnesota business costs to buy.
The good news is the team at BizBuySell.com has made some data available on what it costs to buy a business in Minneapolis.
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 want to buy a company in Minnesota, peruse the BizBuySell Minnesota listings to see the latest business-for-sale listings for Minneapolis and other Minnesota municipalities.
Minneapolis, MN Business Valuations
According to BizBuySell.com, the median asking price for an Minneapolis business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $300,000.
That was based on 291 listings in the Minneapolis-St. Paul-Bloomington, MN-WI metro area. As such, some of the businesses used to derive the median valuation might be outside of Minneapolis, but they are in the area and so are likely representative of Minneapolis 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 Minneapolis business for much less. At the same time, some Minneapolis businesses may cost much more.
Another thing you should know is that this is the asking price for an Minneapolis 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 ratios depend on deal specifics 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 Minneapolis-St. Paul-Bloomington, MN-WI metro area for the last 8 quarters.
Revenue Multiples In Minneapolis, MN
In the Minneapolis-St. Paul-Bloomington, MN-WI metro area, businesses will typically sell for 0.91 times the selling company's revenues. This was the mean revenue multiple for Q4 2008 in this metro area.
In other words, a firm with revenues of $200,000 might list for $181,979. 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 Minneapolis area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $402,000 in Q4 2008.
Cash Flow Multiples In Minneapolis, MN
Another popular way to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the Minneapolis-St. Paul-Bloomington, MN-WI metro area was 4.37.
So, a business with cash flows of $120,000 might have an asking price of $523,808. That's if the business fits the area average. Actual cash flow multiples are based on business specifics.
Here is how cash flow multiples are trending in the Minneapolis area, based on BizBuySell.com's quarterly reports.
Flow Multiple
In case you were wondering what typical cash flows are for a business in Minneapolis, BizBuySell.com reports that the median cash flow for Minneapolis area businesses was $85,000 in Q4 2008.
Things to Consider When Buying a Business in Minneapolis, MN
Don't buy a company simply because you love the type of business. In buying a business, you are buying a livelihood that will need to meet you salary expecations. So, before you move forward, consider how much you can realistically expect to pull out of the business and whether thay will support your desired lifestyle. Always be conservative in making these projections. This helpful business buying counsel comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Minneapolis, MN 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 more information.
Share this article
Additional Resources for Entrepreneurs