Q1 2009 Costs to Buy a Business
How Much Is My Virginia Beach Business Worth?
We just received the latest Virginia Beach, Virginia business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Virginia Beach, VA
Based on data compiled by BizBuySell.com, Virginia Beach business-for-sale listings in Q1 2009 had a median asking price of $280,000.
That compares to a median ask price of $225,000 in Q1 2008. Because the median ask price for businesses for sale in Virginia Beach has risen year over year, we can conclude that many smaller firms in Virginia Beach are holding off on selling.
To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Virginia Beach company for much less. However, some Virginia Beach businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Virginia Beach business. When a business owner lists a company for sale, they typically set a price that ends up being more than the final 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 Virginia Beach Businesses for Sale in the Dataset
The study data comprised 209 listings in the Virginia Beach-Norfolk-Newport News, VA-NC metro area. Many of the businesses in the dataset are outside of Virginia Beach, but they are in the area and so are probably representative of Virginia Beach business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Virginia Beach spanned 216 listings. The downward trend in the number of Virginia Beach business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Virginia Beach, VA
In the Virginia Beach-Norfolk-Newport News, VA-NC metro area, businesses will typically sell for 0.77 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 $153,296. Remember, however, that this is in fact 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 $425,000 in Q1 2009.
As a reference point, the Q1 2008 revenue multiple was 0.74 and the median revenue for listed businesses was $400,000.
Q1 2009 Cash Flow Multiples In Virginia Beach, VA
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Virginia Beach-Norfolk-Newport News, VA-NC metro area was 3.33.
So, a firm with cash flows of $150,000 might have an asking price of $500,065. That calculation is dependent on the business selling for the area's average multiple. Actual cash flow multiples are based on business specifics.
If you are interested in what cash flows are for a business in Virginia Beach, BizBuySell.com reports that the median cash flow for Virginia Beach area businesses was $96,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.23 and the median cash flow was $90,000.
Things to Consider When Selling a Business in Virginia Beach, VA
In this difficult econonmic environment, sellers must be bankers. That means you should offer seller financing to prospective buyers because you, as a seller, may be their only viable source of financing. This tip for selling a business was provided by Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Virginia Beach, VA 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 Virginia Beach, VA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Virginia Beach-Norfolk-Newport News, VA-NC metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Virginia Beach area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Virginia Beach area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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