Q1 2009 Costs to Buy a Business
How Much Is My Kansas City Business Worth?
We just received the latest Kansas City, Missouri business-for-sale statistics.
Q1 2009 Business Valuations in Kansas City, MO
According to statistics issued by BizBuySell.com, Kansas City business-for-sale listings in Q1 2009 had a median asking price of $195,000.
That compares to a median ask price of $225,000 in Q1 2008. Given that Kansas City, MO median business asking prices appear to be dropping, it suggests that larger Kansas City businesses in may be holding off on selling until the economy turns around.
To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Kansas City company for much less. However, some Kansas City businesses may be selling for much more.
Also, this is the asking price for a Kansas City business. When a 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. Given this industry statistic, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
Number of Kansas City Businesses for Sale in the Dataset
The study data comprised 118 listings in the Kansas City, MO-KS metro area. As such, some of the businesses used to derive the median valuation might be outside of Kansas City, but they are in the area and so are likely representative of Kansas City business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Kansas City spanned 146 listings. The downward trend in the number of Kansas City business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Kansas City, MO
In the Kansas City, MO-KS metro area, small businesses will usually 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 $149,166. Keep in mind that this is just an average for revenue multiples in the area. Some small businesses 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 $403,566 in Q1 2009.
In terms of trending year over year, the Q1 2008 revenue multiple was 0.72 and the median revenue for listed businesses was $404,830.
Q1 2009 Cash Flow Multiples In Kansas City, MO
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the Kansas City, MO-KS metro area was 2.87.
So, a business with cash flows of $150,000 might have an asking price of $431,036. 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 Kansas City, BizBuySell.com reports that the median cash flow for Kansas City area businesses was $91,748 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.34 and the median cash flow was $93,187.
Things to Consider When Selling a Business in Kansas City, MO
In this difficult econonmic environment, sellers must be bankers. That means you should offer seller financing to prospective buyers because you, as a seller, may be their only viable source of financing. This tip for selling a business was provided by Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Kansas City, MO 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 Kansas City, MO Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Kansas City, MO-KS metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Kansas City area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Kansas City area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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