Q1 2009 Costs to Buy a Business
How Much Is My Columbus Business Worth?
We just received the latest Columbus, Ohio statistics on business valuations for First Quarter 2009.
Columbus, OH Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Columbus business-for-sale listings in Q1 2009 had a median asking price of $165,000.
That compares to a median ask price of $262,500 in Q1 2008. Given that Columbus, OH median business asking prices appear to be dropping, it suggests that larger Columbus businesses in may be holding off on selling until the economy turns around.
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 Columbus company for much less. However, some Columbus businesses may be selling for much more.
Also, this is the asking price for a Columbus business. When an entrepreneur 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 Columbus Businesses for Sale in the Dataset
The study data comprised 71 listings in the Columbus, OH metro area. As such, some of the businesses used to derive the median valuation might be outside of Columbus, but they are nearby and so are probably representative of Columbus business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Columbus spanned 68 listings. In a market where you would think fewer business owners would be selling it's a bit surprising to see more Columbus business-for-sale listings.
Q1 2009 Revenue Multiples In Columbus, OH
In the Columbus, OH metro area, small businesses will usually sell for 0.83 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 firm with revenues of $200,000 might list for $166,125. Remember, however, that this is strictly 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 $354,363 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.88 and the median revenue for listed businesses was $431,412.
Q1 2009 Cash Flow Multiples In Columbus, OH
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Columbus, OH metro area was 3.32.
So, a business with cash flows of $150,000 might have an asking price of $498,186. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
In case you were wondering what typical cash flows are for a business in Columbus, BizBuySell.com reports that the median cash flow for Columbus area businesses was $75,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 4.44 and the median cash flow was $87,002.
Things to Consider When Selling a Business in Columbus, OH
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 Columbus, OH 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 published every quarter. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.
Historical Data for Columbus, OH Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Columbus, OH metro area for the last 9 quarters.
Here is how median revenue multiples are changing in the Columbus area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Columbus area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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