Q1 2009 Costs to Buy a Business
How Much Is My Norwalk Business Worth?
We just received the latest Norwalk, Connecticut business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Norwalk, CT
According to statistics issued by BizBuySell.com, Norwalk business-for-sale listings in Q1 2009 had a median asking price of $250,000.
That compares to a median ask price of $227,000 in Q1 2008. Since the median ask price for businesses for sale in Norwalk has gone up year over year, we can conclude that many smaller businesses in Norwalk are putting off 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 Norwalk company for much less. However, some Norwalk businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Norwalk 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. Based on this metric, a business initially priced at $225,000 might sell for between $191,250 and $202,500.
Number of Norwalk Businesses for Sale in the Dataset
The study data comprised 143 listings in the Bridgeport-Stamford-Norwalk, CT metro area. Many of the businesses in the dataset are outside of Norwalk, but they are nearby and so are probably representative of Norwalk business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Norwalk spanned 194 listings. The downward trend in the number of Norwalk business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Norwalk, CT
In the Bridgeport-Stamford-Norwalk, CT metro area, companies will typically sell for 0.85 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 $169,420. Keep in mind that this is only an average for revenue multiples in Norwalk and surrounding communities. 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 $375,000 in Q1 2009.
To give this some context, the Q1 2008 revenue multiple was 0.66 and the median revenue for listed businesses was $400,720.
Q1 2009 Cash Flow Multiples In Norwalk, CT
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Bridgeport-Stamford-Norwalk, CT metro area was 3.21.
So, a business with cash flows of $150,000 might have an asking price of $481,019. That's only if the firm complies with the local average. Actual cash flow multiples are based on business specifics.
In case you were wondering what typical cash flows are for a business in Norwalk, BizBuySell.com reports that the median cash flow for Norwalk area businesses was $87,500 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 2.66 and the median cash flow was $90,000.
Things to Consider When Selling a Business in Norwalk, CT
Buyers want a business that is easy to understand and easy to run. Prior to selling a business, be sure to prepare a thorough operations manual that explains in detail how a new buyer would run the business. This helpful advice on how to buy a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Norwalk, CT 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 published every quarter. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.
Historical Data for Norwalk, CT Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Bridgeport-Stamford-Norwalk, CT metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Norwalk area, based on BizBuySell.com's economic data.
The table below shows how cash flow multiples are trending in the Norwalk area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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