Q1 2009 Costs to Buy a Business
How Much Is My Bloomington Business Worth?
We just received the latest Bloomington, Minnesota business valuation data for First Quarter 2009.
Bloomington, MN Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Bloomington business-for-sale listings in Q1 2009 had a median asking price of $275,000.
That compares to a median ask price of $265,000 in Q1 2008. With median asking prices for Bloomington, MN businesses for sale trending up, we can conclude that only businesses that know they can command a premium price are willing to sell in this tough market.
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 Bloomington company for much less. However, some Bloomington businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Bloomington business. When a small 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 depends on deal specifics. Based on this metric, a business initially priced at $225,000 might sell for between $191,250 and $202,500.
Number of Bloomington Businesses for Sale in the Dataset
The study data comprised 351 listings in the Minneapolis-St. Paul-Bloomington, MN-WI metro area. Many of the businesses in the dataset are outside of Bloomington, but they are in the area and so are probably representative of Bloomington business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Bloomington spanned 333 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Bloomington business-for-sale listings.
Q1 2009 Revenue Multiples In Bloomington, MN
In the Minneapolis-St. Paul-Bloomington, MN-WI metro area, businesses will typically sell for 0.94 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 $187,367. Remember, however, that this is simply an average for revenue multiples in Bloomington and surrounding communities. Some entities 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 $425,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.85 and the median revenue for listed businesses was $397,687.
Q1 2009 Cash Flow Multiples In Bloomington, MN
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Minneapolis-St. Paul-Bloomington, MN-WI metro area was 4.28.
So, a company with cash flows of $150,000 might have an asking price of $641,868. 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 Bloomington, BizBuySell.com found that the median cash flow for Bloomington area businesses was $86,382 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.99 and the median cash flow was $85,000.
Tips for Bloomington, MN Business Sellers
When setting a price for a business, it's worthwhile to invest in a professional valuation. If you define the business selling price without a professional valuation, you may end up leaving money on the table or having an unrealistic price that prevents a deal from ever getting done. This helpful tip on buying a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Bloomington, MN 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 Bloomington, MN Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Minneapolis-St. Paul-Bloomington, MN-WI metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Bloomington area, based on BizBuySell.com's data.
The table below shows how cash flow multiples are trending in the Bloomington area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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