Q1 2009 Costs to Buy a Business
How Much Is My Stamford Business Worth?
BizBuySell.com has just released its Stamford, Connecticut business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Stamford, CT
Based on data compiled by BizBuySell.com, Stamford 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 Stamford has gone up year over year, we can conclude that many smaller businesses in Stamford 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 Stamford company for much less. However, some Stamford businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Stamford business. When a business owner lists a company for sale, they typically set a price that ends up being more than the contracted 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 Stamford Businesses for Sale in the Dataset
The study data comprised 143 listings in the Bridgeport-Stamford-Norwalk, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of Stamford, but they are in the area and so are probably representative of Stamford business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Stamford spanned 194 listings. The downward trend in the number of Stamford business-for-sale listings is indicative of the current down economy.
Stamford, CT Q1 2009 Revenue Multiples
In the Bridgeport-Stamford-Norwalk, CT metro area, businesses will usually 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 business that has revenues of $200,000 might list for $169,420. Remember, however, that this is just an average for revenue multiples in the area. Some small businesses 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 put this in perspective, the Q1 2008 revenue multiple was 0.66 and the median revenue for listed businesses was $400,720.
Q1 2009 Cash Flow Multiples In Stamford, CT
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for businesses listed 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 calculation is dependent on the business selling for the area's average multiple. Most businesses will not conform to industry- or area averages.
In case you were wondering what typical cash flows are for a business in Stamford, BizBuySell.com reports that the median cash flow for Stamford 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 Stamford, CT
It's critical to keep the potential sale of your business as confidential as possible. If that confidentiality is compromised, you risk losing customers, employees and vendors. Loose lips sink ships...and sink business-for-sale transactions as well! This useful business selling advice comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Stamford, 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 additional information.
Historical Data for Stamford, CT Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Bridgeport-Stamford-Norwalk, CT metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Stamford area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Stamford area, based on BizBuySell.com's quarterly reports.
Flow Multiple
Share this article
Additional Resources for Entrepreneurs