Q1 2009 Costs to Buy a Business
How Much Is My Sugar Land Business Worth?
Every quarter, BizBuySell.com published business valuation data, and we now have their latest Sugar Land, Texas business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Sugar Land, TX
According to statistics issued by BizBuySell.com, Sugar Land business-for-sale listings in Q1 2009 had a median asking price of $295,000.
That compares to a median ask price of $221,500 in Q1 2008. Since the median ask price for businesses for sale in Sugar Land has gone up year over year, we can conclude that many smaller businesses in Sugar Land 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 Sugar Land company for much less. Alternatively, some Sugar Land businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Sugar Land business. When a small 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. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Sugar Land Businesses for Sale in the Dataset
The study data comprised 505 listings in the Houston-Sugar Land-Baytown, TX metro area. Many of the businesses in the dataset are outside of Sugar Land, but they are in the area and so are likely representative of Sugar Land business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Sugar Land spanned 572 listings. The downward trend in the number of Sugar Land business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Sugar Land, TX
In the Houston-Sugar Land-Baytown, TX metro area, businesses will usually sell for 1.07 times the selling company's revenues. This was the mean revenue multiple for Q1 2009 in this metro area.
In other words, a business that has revenues of $200,000 might list for $214,968. 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 $410,000 in Q1 2009.
To give this some context, the Q1 2008 revenue multiple was 1.07 and the median revenue for listed businesses was $346,667.
Q1 2009 Cash Flow Multiples In Sugar Land, TX
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the Houston-Sugar Land-Baytown, TX metro area was 3.65.
So, a company with cash flows of $150,000 might have an asking price of $548,081. 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 Sugar Land, BizBuySell.com determined that the median cash flow for Sugar Land area businesses was $105,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.56 and the median cash flow was $93,942.
Tips for Sugar Land, TX Business Sellers
A diversified customer base is a great selling point to buyers. If you are preparing to sell a business and your customer base is not diversified, think about how you can diversify your customer base and thereby lower the risks for a buyer. By doing so, you can sell a business for a higher price. Ideally, no single customer should account for more than 10% of your revenues. This advice comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Sugar Land, TX 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 Sugar Land, TX Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Houston-Sugar Land-Baytown, TX metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Sugar Land area, based on BizBuySell.com's economic data.
Here is how cash flow multiples are trending in the Sugar Land area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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