Q1 2009 Costs to Buy a Business
How Much Is My Durham Business Worth?
We just received the latest Durham, North Carolina business-for-sale statistics.
Durham, NC Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Durham business-for-sale listings in Q1 2009 had a median asking price of $235,000.
That compares to a median ask price of $215,000 in Q1 2008. Because the median ask price for businesses for sale in Durham has risen year over year, we can conclude that many smaller firms in Durham 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 Durham company for much less. However, some Durham businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Durham business. When an 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. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Durham Businesses for Sale in the Dataset
The study data comprised 38 listings in the Durham, NC metro area. As such, some of the businesses used to derive the median valuation might be outside of Durham, but they are nearby and so are probably representative of Durham business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Durham spanned 25 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Durham business-for-sale listings.
Durham, NC Q1 2009 Revenue Multiples
In the Durham, NC metro area, small businesses will typically sell for 0.75 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 $149,589. Keep in mind that this is just 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 $511,500 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 1.32 and the median revenue for listed businesses was $335,579.
Q1 2009 Cash Flow Multiples In Durham, NC
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Durham, NC metro area was 3.57.
So, a firm with cash flows of $150,000 might have an asking price of $535,405. That's only if the firm complies with the local average. In practice, cash flow multiples can vary considerably from one business to another.
If you are interested in what cash flows are for a business in Durham, BizBuySell.com reports that the median cash flow for Durham area businesses was $90,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 4.69 and the median cash flow was $63,500.
Tips for Durham, NC Business Sellers
Don't assume that the price you initially negotiate with a buyer will stay the same all the way to closing. During due diligence, the buyer may find some blemishes on the businesses that lead them to lower their offer. This is a natural part of the process and should be expected. This helpful business selling tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Durham, NC 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 Durham, NC Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Durham, NC metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Durham area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Durham area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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