Q1 2009 Costs to Buy a Business
How Much Is My Nashville Business Worth?
We just received the latest Nashville, Tennessee business valuation data for First Quarter 2009.
Nashville, TN Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Nashville business-for-sale listings in Q1 2009 had a median asking price of $330,000.
That compares to a median ask price of $280,000 in Q1 2008. Because the median ask price for businesses for sale in Nashville has risen year over year, we can conclude that many smaller firms in Nashville 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 Nashville company for much less. However, some Nashville businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Nashville 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. An owner who wants $275,000 might actually get between $233,750 and $247,500.
Number of Nashville Businesses for Sale in the Dataset
The study data comprised 236 listings in the Nashville-Davidson--Murfreesboro, TN metro area. As such, some of the businesses used to derive the median valuation might be outside of Nashville, but they are in the area and so are probably representative of Nashville business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Nashville spanned 223 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Nashville business-for-sale listings.
Nashville, TN Q1 2009 Revenue Multiples
In the Nashville-Davidson--Murfreesboro, TN metro area, companies will usually sell for 0.93 times the selling company's revenues. The data indicates that is the mean revenue multiple for Q1 2009 in this area of the country.
In other words, a business that has revenues of $200,000 might list for $185,077. 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 $521,492 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 1.00 and the median revenue for listed businesses was $491,479.
Q1 2009 Cash Flow Multiples In Nashville, TN
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the Nashville-Davidson--Murfreesboro, TN metro area was 3.96.
So, a company with cash flows of $150,000 might have an asking price of $593,369. That calculation is dependent on the business selling for the area's average multiple. 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 Nashville, BizBuySell.com reports that the median cash flow for Nashville area businesses was $112,393 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 4.25 and the median cash flow was $100,000.
Tips for Nashville, TN Business Sellers
When setting a price for a business, it's worthwhile to invest in a professional valuation. If you define the business selling price without a professional valuation, you may end up leaving money on the table or having an unrealistic price that prevents a deal from ever getting done. This helpful tip on buying a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Nashville, TN 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 Nashville, TN Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Nashville-Davidson--Murfreesboro, TN metro area for the last 9 quarters.
Here is how median revenue multiples are changing in the Nashville area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Nashville area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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