Q1 2009 Costs to Buy a Business
How Much Is My Oakland Business Worth?
Every quarter, BizBuySell.com published business valuation data, and we now have their latest Oakland, California business-for-sale statistics.
Oakland, CA Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Oakland business-for-sale listings in Q1 2009 had a median asking price of $250,000.
That compares to a median ask price of $325,000 in Q1 2008. One interpretation of the lower median asking price is that Oakland, CA sellers are dropping their asking prices in light of market conditions.
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 Oakland company for much less. However, some Oakland businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Oakland business. When an 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. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Oakland Businesses for Sale in the Dataset
The study data comprised 319 listings in the San Francisco-Oakland-Fremont, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Oakland, but they are nearby and so are probably representative of Oakland business valuations.
In Q1 2008, just one year ago, there were 367 Oakland listings in the BizBuySell.com dataset. As a result of the recession, fewer Oakland business owners are selling because they hope to weather the storm and sell after the economy turns around.
Q1 2009 Revenue Multiples In Oakland, CA
In the San Francisco-Oakland-Fremont, CA metro area, businesses will usually sell for 0.70 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 business that has revenues of $200,000 might list for $139,044. Keep in mind that this is only 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 $500,000 in Q1 2009.
As a reference point, the Q1 2008 revenue multiple was 0.83 and the median revenue for listed businesses was $520,000.
Q1 2009 Cash Flow Multiples In Oakland, CA
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the San Francisco-Oakland-Fremont, CA metro area was 3.08.
So, a company with cash flows of $150,000 might have an asking price of $461,810. That calculation is dependent on the business selling for the area's average multiple. Actual cash flow multiples are based on business specifics.
In case you were wondering what typical cash flows are for a business in Oakland, BizBuySell.com reports that the median cash flow for Oakland area businesses was $103,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.45 and the median cash flow was $120,000.
Tips for Oakland, CA Business Sellers
The best time to sell a business is when you don't have to sell the business. If you have to sell under time pressure, you are not likely to get the best sale price. So, don't wait to sell a business until something (e.g. bad health, a divorce, etc.) forces you to sell. This advice on selling a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Oakland, CA Businesses
If you are contemplating buying a business or selling a business and would like to find out how much a business is worth, 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 Oakland, CA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the San Francisco-Oakland-Fremont, CA metro area for the last 9 quarters.
Here is how median revenue multiples are tracking in the Oakland area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Oakland area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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