Q1 2009 Costs to Buy a Business
How Much Is My Louisville Business Worth?
We just received the latest Louisville, Kentucky business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Louisville, KY
According to statistics issued by BizBuySell.com, Louisville business-for-sale listings in Q1 2009 had a median asking price of $232,500.
That compares to a median ask price of $250,000 in Q1 2008. One interpretation of the lower median asking price is that Louisville, KY sellers are dropping their asking prices in light of market conditions.
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 Louisville company for much less. However, some Louisville businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Louisville 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 depends on deal specifics. As an example, a company listed for $125,000 would often sell for between $106,250 and $112,500.
Number of Louisville Businesses for Sale in the Dataset
The study data comprised 76 listings in the Louisville-Jefferson County, KY-IN metro area. Many of the businesses in the dataset are outside of Louisville, but they are in the area and so are probably representative of Louisville business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Louisville spanned 105 listings. In a market where you would think fewer business owners would be selling it's a bit surprising to see more Louisville business-for-sale listings.
Louisville, KY Q1 2009 Revenue Multiples
In the Louisville-Jefferson County, KY-IN metro area, businesses will typically sell for 0.88 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 $176,618. Remember, however, that this is just an average for revenue multiples in the area. Some entities 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 $363,655 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.83 and the median revenue for listed businesses was $400,000.
Q1 2009 Cash Flow Multiples In Louisville, KY
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Louisville-Jefferson County, KY-IN metro area was 4.14.
So, a business with cash flows of $150,000 might have an asking price of $621,369. That's only if the firm complies with the local average. The actual distribution on revenue multiples for a given set of businesses can be quite wide-ranging.
In case you were wondering what typical cash flows are for a business in Louisville, BizBuySell.com reports that the median cash flow for Louisville area businesses was $75,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 4.24 and the median cash flow was $75,000.
Tips for Louisville, KY Business Sellers
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 Louisville, KY 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 Louisville, KY Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Louisville-Jefferson County, KY-IN metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Louisville area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Louisville area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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