Q1 2009 Costs to Buy a Business
How Much Is My Austin Business Worth?
Every quarter, BizBuySell.com published business valuation data, and we now have their latest Austin, Texas business-for-sale statistics.
Q1 2009 Business Valuations in Austin, TX
Based on data compiled by BizBuySell.com, Austin business-for-sale listings in Q1 2009 had a median asking price of $325,000.
That compares to a median ask price of $297,000 in Q1 2008. Because the median ask price for businesses for sale in Austin has risen year over year, we can conclude that many smaller firms in Austin are holding off on 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 Austin company for much less. Alternatively, some Austin businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Austin business. When a small business owner lists a business 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. Based on this metric, a business initially priced at $225,000 might sell for between $191,250 and $202,500.
Number of Austin Businesses for Sale in the Dataset
The study data comprised 213 listings in the Austin-Round Rock, TX metro area. As such, some of the businesses used to derive the median valuation might be outside of Austin, but they are in the area and so are probably representative of Austin business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Austin spanned 184 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Austin business-for-sale listings.
Austin, TX Q1 2009 Revenue Multiples
In the Austin-Round Rock, TX metro area, businesses will usually sell for 0.97 times the selling company's revenues. This 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 $194,877. Keep in mind that this is in fact an average for revenue multiples in Austin and surrounding communities. Some businesses 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 $577,000 in Q1 2009.
To give this some context, the Q1 2008 revenue multiple was 0.95 and the median revenue for listed businesses was $453,887.
Q1 2009 Cash Flow Multiples In Austin, TX
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Austin-Round Rock, TX metro area was 3.88.
So, a business with cash flows of $150,000 might have an asking price of $582,352. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
If you are interested in what cash flows are for a business in Austin, BizBuySell.com reports that the median cash flow for Austin area businesses was $120,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.56 and the median cash flow was $96,566.
Things to Consider When Selling a Business in Austin, TX
Selling a business can be a highly emotional process. To many business owners, the business is their baby, the result of years of hard work. However, when selling a business, it's imperative to keep emotions in check. Be objective and rational and you'll get across the finish line in the best possible way. This good selling-a-business tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Austin, TX 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 Austin, TX Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Austin-Round Rock, TX metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Austin area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Austin area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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