Q1 2009 Costs to Buy a Business
How Much Is My Northern New Jersey Business Worth?
We just received the latest Northern New Jersey, New Jersey small business valuation trend data for First Quarter 2009.
Q1 2009 Business Valuations in Northern New Jersey, NJ
According to statistics issued by BizBuySell.com, Northern New Jersey business-for-sale listings in Q1 2009 had a median asking price of $250,000.
That compares to a median ask price of $250,000 in Q1 2008. In spite of the difficult economy, Northern New Jersey, NJ business valuations appear to be relatively stable.
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 Northern New Jersey company for much less. However, some Northern New Jersey businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Northern New Jersey business. When a company 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. This suggests that a company listed for $325,000 might be purchased for between $276,250 and $292,500.
Number of Northern New Jersey Businesses for Sale in the Dataset
The study data comprised 4939 listings in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area. As such, some of the businesses used to derive the median valuation might be outside of Northern New Jersey, but they are in the area and so are probably representative of Northern New Jersey business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Northern New Jersey spanned 5314 listings. The downward trend in the number of Northern New Jersey business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Northern New Jersey, NJ
In the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area, businesses will typically sell for 0.82 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 firm with revenues of $200,000 might list for $164,170. Keep in mind that this is just an average for revenue multiples in the area. Some 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 $450,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.87 and the median revenue for listed businesses was $414,635.
Q1 2009 Cash Flow Multiples In Northern New Jersey, NJ
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area was 2.91.
So, a business with cash flows of $150,000 might have an asking price of $437,122. 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 Northern New Jersey, BizBuySell.com reports that the median cash flow for Northern New Jersey area businesses was $120,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 2.94 and the median cash flow was $113,686.
Things to Consider When Selling a Business in Northern New Jersey, NJ
Selling a business can be a highly emotional process. To many business owners, the business is their baby, the result of years of hard work. However, when selling a business, it's imperative to keep emotions in check. Be objective and rational and you'll get across the finish line in the best possible way. This good selling-a-business tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Northern New Jersey, NJ Businesses
If you are contemplating buying a business or selling a business and would like to look at comparables in the area, 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 Northern New Jersey, NJ Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area for the last 9 quarters.
Here is how median revenue multiples are tracking in the Northern New Jersey area, based on BizBuySell.com's economic data.
The table below shows how cash flow multiples are trending in the Northern New Jersey area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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