Q1 2009 Costs to Buy a Business
How Much Is My Alameda Business Worth?
We just received the latest Alameda, California statistics on business valuations for First Quarter 2009.
Q1 2009 Business Valuations in Alameda, CA
Based on data compiled by BizBuySell.com, Alameda business-for-sale listings in Q1 2009 had a median asking price of $230,000.
That compares to a median ask price of $0 in . Since the median ask price for businesses for sale in Alameda has gone up year over year, we can conclude that many smaller businesses in Alameda are putting off selling.
To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Alameda company for much less. Similarly, some Alameda businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Alameda business. When a business owner lists a company for sale, they typically set a price that ends up being more than the eventual sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. In practice, this means a business listed for $250,000 would go for between $212,500 and $225,000.
Number of Alameda Businesses for Sale in the Dataset
The study data comprised 175 listings in the Contra Costa-Alameda-Solano, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Alameda, but they are in the area and so are probably representative of Alameda business valuations.
One year ago, in , the BizBuySell.com dataset for Alameda spanned listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Alameda business-for-sale listings.
Q1 2009 Revenue Multiples In Alameda, CA
In the Contra Costa-Alameda-Solano, CA metro area, small businesses will typically sell for 0.59 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this area of the country.
In other words, a business that has revenues of $200,000 might list for $117,162. Remember, however, that this is in fact an average for revenue multiples in the area. Some companies will have higher revenue multiples and others will have lower revenue multiples.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $509,020 in Q1 2009.
As a reference point, the revenue multiple was 0.00 and the median revenue for listed businesses was $0.
Q1 2009 Cash Flow Multiples In Alameda, CA
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Contra Costa-Alameda-Solano, CA metro area was 3.22.
So, a business with cash flows of $150,000 might have an asking price of $482,682. That's only if the firm complies with the local average. The actual distribution on revenue multiples for a given set of businesses can be quite wide-ranging.
If you are interested in what cash flows are for a business in Alameda, BizBuySell.com reports that the median cash flow for Alameda area businesses was $105,000 in Q1 2009. In , cash flow multiples clocked in at 0.00 and the median cash flow was $0.
Things to Consider When Selling a Business in Alameda, CA
Most business sales involve seller financing, especially in this enviroment when credit is tight. You have to finance as much as 70% of the purchase price. Typically, you would structure the deal to be paid off in full within four to five years. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Alameda, CA Businesses
If you are contemplating buying a business or selling a business and would like to look at comparables in the area, we suggest you try the BizBuySell.com Business Valuation Tool. You can modify the dataset that creates business valuation estimates to meet your specific criteria. As a bonus, 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 report that tracks trends in the business-for-sale marketplace. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for additional information.
Historical Data for Alameda, CA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Contra Costa-Alameda-Solano, CA metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Alameda area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Alameda area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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