Q1 2009 Costs to Buy a Business
How Much Is My San Marcos Business Worth?
BizBuySell.com has just released its San Marcos, California business-for-sale statistics.
San Marcos, CA Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, San Marcos business-for-sale listings in Q1 2009 had a median asking price of $199,000.
That compares to a median ask price of $220,000 in Q1 2008. Given that San Marcos, CA median business asking prices appear to be dropping, it suggests that larger San Marcos businesses in may be holding off on selling until the economy turns around.
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 San Marcos company for much less. However, some San Marcos businesses may be selling for much more.
Also, this is the asking price for a San Marcos business. When an entrepreneur 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 depends on deal specifics. This suggests that a company listed for $325,000 might be purchased for between $276,250 and $292,500.
Number of San Marcos Businesses for Sale in the Dataset
The study data comprised 365 listings in the San Diego-Carlsbad-San Marcos, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of San Marcos, but they are in the area and so are probably representative of San Marcos business valuations.
In Q1 2008, just one year ago, there were 391 San Marcos listings in the BizBuySell.com dataset. As a result of the recession, fewer San Marcos business owners are selling because they hope to weather the storm and sell after the economy turns around.
Q1 2009 Revenue Multiples In San Marcos, CA
In the San Diego-Carlsbad-San Marcos, CA metro area, businesses will typically sell for 0.64 times the selling company's revenues. This 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 $127,781. 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 $358,000 in Q1 2009.
To give this some context, the Q1 2008 revenue multiple was 0.76 and the median revenue for listed businesses was $360,000.
Q1 2009 Cash Flow Multiples In San Marcos, CA
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the San Diego-Carlsbad-San Marcos, CA metro area was 2.69.
So, a firm with cash flows of $150,000 might have an asking price of $403,797. That's only if the firm complies with the local average. In practice, cash flow multiples can vary considerably from one business to another.
In case you were wondering what typical cash flows are for a business in San Marcos, BizBuySell.com found that the median cash flow for San Marcos area businesses was $85,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.08 and the median cash flow was $84,000.
Tips for San Marcos, CA Business Sellers
When choosing a business broker, look for a broker that can maintain confidentiality and simultaneously get you the most qualified buyers. In addition, make sure the business broker has a good track record in facilitating negotiations between buyer and seller in a way that arrives at the best possible transaction. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for San Marcos, CA Businesses
If you are contemplating buying a business or selling a business and would like to value a specific business, 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 San Marcos, CA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the San Diego-Carlsbad-San Marcos, CA metro area for the last 9 quarters.
Here is how median revenue multiples are changing in the San Marcos area, based on BizBuySell.com's economic data.
The table below shows how cash flow multiples are trending in the San Marcos area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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