Q1 2009 Costs to Buy a Business

How Much Is My Fresno Business Worth?

We just received the latest Fresno, California business-for-sale statistics.

Fresno, CA Q1 2009 Business Valuations

According to statistics issued by BizBuySell.com, Fresno business-for-sale listings in Q1 2009 had a median asking price of $375,000.

That compares to a median ask price of $355,000 in Q1 2008. Since the median ask price for businesses for sale in Fresno has gone up year over year, we can conclude that many smaller businesses in Fresno are putting off 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 Fresno company for much less. However, some Fresno businesses may be selling for much more.

Also, this is the asking price for a Fresno 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 depends on deal specifics. With this in mind, a business listed for $175,000 might sell for between $148,750 and $157,500.

Number of Fresno Businesses for Sale in the Dataset

The study data comprised 33 listings in the Fresno, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Fresno, but they are nearby and so are probably representative of Fresno business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for Fresno spanned 44 listings. The downward trend in the number of Fresno business-for-sale listings is indicative of the current down economy.

Fresno, CA Q1 2009 Revenue Multiples

In the Fresno, CA metro area, businesses will typically sell for 0.77 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 $154,738. Keep in mind that this is in fact an average for revenue multiples in Fresno 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 $508,000 in Q1 2009.

To put this in perspective, the Q1 2008 revenue multiple was 0.94 and the median revenue for listed businesses was $405,102.

Q1 2009 Cash Flow Multiples In Fresno, CA

Cash flow multiples are another popular technique to value a business.

For Q1 2009, the average cash flow multiple for listed businesses in the Fresno, CA metro area was 3.63.

So, a firm with cash flows of $150,000 might have an asking price of $544,579. That's only if the firm complies with the local average. Cash flow multiples will usually vary considerably based on many factors.

In case you were wondering what typical cash flows are for a business in Fresno, BizBuySell.com found that the median cash flow for Fresno area businesses was $105,937 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 4.03 and the median cash flow was $100,000.

Things to Consider When Selling a Business in Fresno, CA

Before you sell a business, you will need to recast your financials to adjust for what the business owner takes out of the business. This includes things like a high salary, car expenses and other owner perks. This useful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.

Business Valuations for Fresno, CA Businesses

If you are contemplating buying a business or selling a business and would like to get an estimated business valuation, 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 Fresno, CA Business Valuations

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Fresno, CA metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$282,000
Q2 2007
$327,000
Q3 2007
$302,500
Q4 2007
$350,000
Q1 2008
$355,000
Q2 2008
$325,000
Q3 2008
$327,000
Q4 2008
$367,500
Q1 2009
$375,000

Here is how median revenue multiples are trending in the Fresno area, based on BizBuySell.com's quarterly reports.

Quarter
Revenue Multiple
Q1 2007
0.68
Q2 2007
1.01
Q3 2007
1.02
Q4 2007
0.88
Q1 2008
0.94
Q2 2008
0.81
Q3 2008
0.75
Q4 2008
0.70
Q1 2009
0.77

The table below shows how cash flow multiples are trending in the Fresno area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
3.32
Q2 2007
3.78
Q3 2007
3.52
Q4 2007
3.75
Q1 2008
4.03
Q2 2008
3.62
Q3 2008
3.39
Q4 2008
3.36
Q1 2009
3.63

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