Q1 2009 Costs to Buy a Business
How Much Is My St. Petersburg Business Worth?
Every quarter, BizBuySell.com published business valuation data, and we now have their latest St. Petersburg, Florida small business valuation trend data for First Quarter 2009.
Q1 2009 Business Valuations in St. Petersburg, FL
Based on data compiled by BizBuySell.com, St. Petersburg business-for-sale listings in Q1 2009 had a median asking price of $199,000.
That compares to a median ask price of $225,000 in Q1 2008. Given that St. Petersburg, FL median business asking prices appear to be dropping, it suggests that larger St. Petersburg 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 St. Petersburg company for much less. However, some St. Petersburg businesses may be selling for much more.
Another thing to remember is that this is the asking price for a St. Petersburg 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. In practice, this means a business listed for $250,000 would go for between $212,500 and $225,000.
Number of St. Petersburg Businesses for Sale in the Dataset
The study data comprised 938 listings in the Tampa-St. Petersburg-Clearwater, FL metro area. As such, some of the businesses used to derive the median valuation might be outside of St. Petersburg, but they are nearby and so are probably representative of St. Petersburg business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for St. Petersburg spanned 984 listings. The downward trend in the number of St. Petersburg business-for-sale listings is indicative of the current down economy.
St. Petersburg, FL Q1 2009 Revenue Multiples
In the Tampa-St. Petersburg-Clearwater, FL metro area, small businesses will typically sell for 0.94 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 $187,222. Keep in mind 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 $341,478 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.98 and the median revenue for listed businesses was $325,000.
Q1 2009 Cash Flow Multiples In St. Petersburg, FL
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Tampa-St. Petersburg-Clearwater, FL metro area was 3.45.
So, a business with cash flows of $150,000 might have an asking price of $517,630. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
In case you were wondering what typical cash flows are for a business in St. Petersburg, BizBuySell.com reports that the median cash flow for St. Petersburg area businesses was $80,050 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.45 and the median cash flow was $84,596.
Things to Consider When Selling a Business in St. Petersburg, FL
Don't assume that the price you initially negotiate with a buyer will stay the same all the way to closing. During due diligence, the buyer may find some blemishes on the businesses that lead them to lower their offer. This is a natural part of the process and should be expected. This helpful business selling tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for St. Petersburg, FL 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 more information.
Historical Data for St. Petersburg, FL Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Tampa-St. Petersburg-Clearwater, FL metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the St. Petersburg area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the St. Petersburg area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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