Q1 2009 Costs to Buy a Business
How Much Is My Salt Lake City Business Worth?
We just received the latest Salt Lake City, Utah business valuation data for First Quarter 2009.
Salt Lake City, UT Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Salt Lake City business-for-sale listings in Q1 2009 had a median asking price of $355,000.
That compares to a median ask price of $225,000 in Q1 2008. Since the median ask price for businesses for sale in Salt Lake City has gone up year over year, we can conclude that many smaller businesses in Salt Lake City 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 Salt Lake City company for much less. However, some Salt Lake City businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Salt Lake City business. When a business owner lists a company 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. With this in mind, a business listed for $175,000 might sell for between $148,750 and $157,500.
Number of Salt Lake City Businesses for Sale in the Dataset
The study data comprised 220 listings in the Salt Lake City, UT metro area. As such, some of the businesses used to derive the median valuation might be outside of Salt Lake City, but they are in the area and so are probably representative of Salt Lake City business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Salt Lake City spanned 263 listings. The downward trend in the number of Salt Lake City business-for-sale listings is indicative of the current down economy.
Salt Lake City, UT Q1 2009 Revenue Multiples
In the Salt Lake City, UT metro area, small businesses will typically sell for 1.10 times the selling company's revenues. The data indicates that is the mean revenue multiple for Q1 2009 in this part of the country.
In other words, a business that has revenues of $200,000 might list for $220,302. Remember, however, 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 $470,846 in Q1 2009.
As a reference point, the Q1 2008 revenue multiple was 0.97 and the median revenue for listed businesses was $341,243.
Q1 2009 Cash Flow Multiples In Salt Lake City, UT
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Salt Lake City, UT metro area was 3.71.
So, a business with cash flows of $150,000 might have an asking price of $556,689. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
If you are interested in what cash flows are for a business in Salt Lake City, BizBuySell.com reports that the median cash flow for Salt Lake City area businesses was $117,194 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.70 and the median cash flow was $85,000.
Tips for Salt Lake City, UT Business Sellers
When selling a business, valuations will be based on your profits. So, be sure to sell a business at a point when your profits are doing well if you want to sell for a great price. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Salt Lake City, UT 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 more information.
Historical Data for Salt Lake City, UT Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Salt Lake City, UT metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Salt Lake City area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Salt Lake City area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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