Buying a Business
Cost to Buy a Business in Sunnyvale
Considering purchasing a company in Sunnyvale, California? You'd do well to learn a little bit about trends in Sunnyvale, California business valuations.
The good news is the team at BizBuySell.com has made some data available on what it costs to buy a business in Sunnyvale.
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 are looking to buy a business in California, check out the BizBuySell California listings to to be on the inside track with the newest business-for-sale listings for Sunnyvale and other California towns.
Sunnyvale, CA Business Valuations
According to BizBuySell.com, the median asking price for an Sunnyvale business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $260,000.
That was based on 161 listings in the San Jose-Sunnyvale-Santa Clara, CA metro area. Many of the businesses in the dataset are outside of Sunnyvale, but they are nearby and so are probably representative of Sunnyvale 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 Sunnyvale business for much less. At the same time, some Sunnyvale businesses may cost much more.
Another thing you should know is that this is the asking price for an Sunnyvale business. Typically, when a company owner lists a business 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. 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 San Jose-Sunnyvale-Santa Clara, CA metro area for the last 8 quarters.
Revenue Multiples In Sunnyvale, CA
In the San Jose-Sunnyvale-Santa Clara, CA metro area, companies will typically sell for 0.82 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 $164,104. 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 Sunnyvale area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $425,000 in Q4 2008.
Cash Flow Multiples In Sunnyvale, CA
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 San Jose-Sunnyvale-Santa Clara, CA metro area was 3.47.
So, a business with cash flows of $120,000 might have an asking price of $416,356. That's if the business fits the area average. Cash flow multiples can vary considerably based on many factors.
The table below shows how cash flow multiples are trending in the Sunnyvale area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Sunnyvale, BizBuySell.com reports that the median cash flow for Sunnyvale area businesses was $100,000 in Q4 2008.
Tips for Sunnyvale, CA Business Buyers
The baby boomer generation has made its mark in the business world. Aging boomers are now looking toward retirement, while many younger boomers find they're ready to be their own boss. It's a good idea to look at businesses that are being sold by aging business boomers as they may be motivated sellers. This helpful tip on buying a business comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Sunnyvale, CA 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 published on a quarterly basis. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for more information.
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