Buying a Business
Cost to Buy a Business in Stamford
Planning on buying a Stamford, Connecticut business? Your first question will probably be "How much does it cost to buy a business in Stamford?"
Luckily, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Stamford.
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 Connecticut, check out the BizBuySell Connecticut listings to see the latest business-for-sale listings for Stamford and other Connecticut municipalities.
Business Valuations in Stamford, CT
According to BizBuySell.com, the median asking price for an Stamford business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $255,000.
That was based on 156 listings in the Bridgeport-Stamford-Norwalk, CT metro area. Many of the businesses in the dataset are outside of Stamford, but they are in the area and so are likely representative of Stamford 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 Stamford business for much less. At the same time, some Stamford businesses may cost much more.
Another thing you should know is that this is the asking price for an Stamford business. Typically, when a small 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. Given this industry norm, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Bridgeport-Stamford-Norwalk, CT metro area for the last 8 quarters.
Revenue Multiples In Stamford, CT
In the Bridgeport-Stamford-Norwalk, CT metro area, businesses will typically sell for 0.77 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this metro area.
In other words, a business that has revenues of $200,000 might list for $154,117. Remember, however, that this is simply 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 changing in the Stamford area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $395,000 in Q4 2008.
Cash Flow Multiples In Stamford, CT
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Bridgeport-Stamford-Norwalk, CT metro area was 2.92.
So, a business with cash flows of $120,000 might have an asking price of $350,431. That's if the business fits the area average. Most businesses will not conform to industry- or area averages.
Here is how cash flow multiples are trending in the Stamford area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Stamford, BizBuySell.com reports that the median cash flow for Stamford area businesses was $98,754 in Q4 2008.
Things to Consider When Buying a Business in Stamford, CT
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 Stamford, CT 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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