Q1 2009 Costs to Buy a Business
How Much Is My Mesa Business Worth?
BizBuySell.com has just released its Mesa, Arizona business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Mesa, AZ
Based on data compiled by BizBuySell.com, Mesa business-for-sale listings in Q1 2009 had a median asking price of $210,000.
That compares to a median ask price of $220,000 in Q1 2008. Given that Mesa, AZ median business asking prices appear to be dropping, it suggests that larger Mesa 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 Mesa company for much less. However, some Mesa businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Mesa 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. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Mesa Businesses for Sale in the Dataset
The study data comprised 1323 listings in the Phoenix-Mesa-Scottsdale, AZ metro area. Many of the businesses in the dataset are outside of Mesa, but they are in the area and so are probably representative of Mesa business valuations.
In Q1 2008, just one year ago, there were 1479 Mesa listings in the BizBuySell.com dataset. As a result of the recession, fewer Mesa business owners are selling because they hope to weather the storm and sell after the economy turns around.
Q1 2009 Revenue Multiples In Mesa, AZ
In the Phoenix-Mesa-Scottsdale, AZ metro area, companies will typically sell for 0.89 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this metro area.
In other words, a firm with revenues of $200,000 might list for $177,590. Keep in mind that this is strictly 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 $330,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.88 and the median revenue for listed businesses was $320,000.
Q1 2009 Cash Flow Multiples In Mesa, AZ
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the Phoenix-Mesa-Scottsdale, AZ metro area was 3.27.
So, a company with cash flows of $150,000 might have an asking price of $490,247. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
In case you were wondering what typical cash flows are for a business in Mesa, BizBuySell.com reports that the median cash flow for Mesa area businesses was $82,265 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.27 and the median cash flow was $82,425.
Things to Consider When Selling a Business in Mesa, AZ
Selling a business can be a full-time job in and of itself. If you sell on your own, without assistance from a business broker, you may be distracted from running the business, which can result in a deterioriation in business results and a lower sale price. This helpful advice was provided by Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Mesa, AZ 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 additional information.
Historical Data for Mesa, AZ Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Phoenix-Mesa-Scottsdale, AZ metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Mesa area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Mesa area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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