Q1 2009 Costs to Buy a Business
How Much Is My Davidson Business Worth?
Every quarter, BizBuySell.com published business valuation data, and we now have their latest Davidson, Tennessee statistics on business valuations for First Quarter 2009.
Q1 2009 Business Valuations in Davidson, TN
According to statistics issued by BizBuySell.com, Davidson business-for-sale listings in Q1 2009 had a median asking price of $330,000.
That compares to a median ask price of $280,000 in Q1 2008. Because the median ask price for businesses for sale in Davidson has risen year over year, we can conclude that many smaller firms in Davidson 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 Davidson company for much less. However, some Davidson businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Davidson business. When a business owner lists a business for sale, they typically set a price that ends up being more than the contracted 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 Davidson Businesses for Sale in the Dataset
The study data comprised 236 listings in the Nashville-Davidson--Murfreesboro, TN metro area. As such, some of the businesses used to derive the median valuation might be outside of Davidson, but they are in the area and so are likely representative of Davidson business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Davidson spanned 223 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Davidson business-for-sale listings.
Q1 2009 Revenue Multiples In Davidson, TN
In the Nashville-Davidson--Murfreesboro, TN metro area, businesses will typically sell for 0.93 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 $185,077. Keep in mind that this is in fact an average for revenue multiples in Davidson and surrounding communities. 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 $521,492 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 1.00 and the median revenue for listed businesses was $491,479.
Q1 2009 Cash Flow Multiples In Davidson, TN
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the Nashville-Davidson--Murfreesboro, TN metro area was 3.96.
So, a business with cash flows of $150,000 might have an asking price of $593,369. 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 Davidson, BizBuySell.com reports that the median cash flow for Davidson area businesses was $112,393 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 4.25 and the median cash flow was $100,000.
Tips for Davidson, TN Business Sellers
The best time to sell a business is when you don't have to sell the business. If you have to sell under time pressure, you are not likely to get the best sale price. So, don't wait to sell a business until something (e.g. bad health, a divorce, etc.) forces you to sell. This advice on selling a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Davidson, TN Businesses
If you are contemplating buying a business or selling a business and would like to value a specific business, 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 Davidson, TN Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Nashville-Davidson--Murfreesboro, TN metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Davidson area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Davidson area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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