Q1 2009 Costs to Buy a Business
How Much Is My Buffalo Business Worth?
We just received the latest Buffalo, New York business-for-sale statistics.
Q1 2009 Business Valuations in Buffalo, NY
Based on data compiled by BizBuySell.com, Buffalo business-for-sale listings in Q1 2009 had a median asking price of $355,000.
That compares to a median ask price of $235,000 in Q1 2008. Because the median ask price for businesses for sale in Buffalo has risen year over year, we can conclude that many smaller firms in Buffalo are holding off on selling.
Please understand that this is the median asking price for a business. If you want to buy a business, you may be able to buy a Buffalo company for much less. However, some Buffalo businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Buffalo 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. If an owner lists a business for $150,000, it might end up selling for between $127,500 and $135,000.
Number of Buffalo Businesses for Sale in the Dataset
The study data comprised 28 listings in the Buffalo-Niagara Falls, NY metro area. As such, some of the businesses used to derive the median valuation might be outside of Buffalo, but they are in the area and so are likely representative of Buffalo business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Buffalo spanned 103 listings. In a market where you would think fewer business owners would be selling it's a bit surprising to see more Buffalo business-for-sale listings.
Q1 2009 Revenue Multiples In Buffalo, NY
In the Buffalo-Niagara Falls, NY metro area, companies will typically sell for 1.01 times the selling company's revenues. The data indicates that is 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 $201,953. Keep in mind that this is in fact an average for revenue multiples in the area. Some firms 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 $435,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.73 and the median revenue for listed businesses was $550,000.
Q1 2009 Cash Flow Multiples In Buffalo, NY
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Buffalo-Niagara Falls, NY metro area was 3.52.
So, a business with cash flows of $150,000 might have an asking price of $527,778. 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 Buffalo, BizBuySell.com found that the median cash flow for Buffalo area businesses was $98,500 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.77 and the median cash flow was $83,000.
Tips for Buffalo, NY Business Sellers
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 Buffalo, NY 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 more information.
Historical Data for Buffalo, NY Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Buffalo-Niagara Falls, NY metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Buffalo area, based on BizBuySell.com's data.
Here is how cash flow multiples are trending in the Buffalo area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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