Q1 2009 Costs to Buy a Business
How Much Is My West Hartford Business Worth?
We just received the latest West Hartford, Connecticut small business valuation trend data for First Quarter 2009.
Q1 2009 Business Valuations in West Hartford, CT
According to statistics issued by BizBuySell.com, West Hartford business-for-sale listings in Q1 2009 had a median asking price of $200,000.
That compares to a median ask price of $175,000 in Q1 2008. With median asking prices for West Hartford, CT businesses for sale trending up, we can conclude that only businesses that know they can command a premium price are willing to sell in this tough market.
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 West Hartford company for much less. However, some West Hartford businesses may be selling for much more.
Another thing to remember is that this is the asking price for a West Hartford business. When an entrepreneur lists a company for sale, they typically set a price that ends up being more than the ultimate sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. Given this industry statistic, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
Number of West Hartford Businesses for Sale in the Dataset
The study data comprised 181 listings in the Hartford-West Hartford-East Hartford, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of West Hartford, but they are close by and so are probably representative of West Hartford business valuations.
In Q1 2008, just one year ago, there were 204 West Hartford listings in the BizBuySell.com dataset. As a result of the recession, fewer West Hartford business owners are selling because they hope to weather the storm and sell after the economy turns around.
Q1 2009 Revenue Multiples In West Hartford, CT
In the Hartford-West Hartford-East Hartford, CT metro area, businesses will usually sell for 0.62 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 firm with revenues of $200,000 might list for $124,455. Remember, however, that this is strictly an average for revenue multiples in the area. Some companies 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 0.63 and the median revenue for listed businesses was $357,000.
Q1 2009 Cash Flow Multiples In West Hartford, CT
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Hartford-West Hartford-East Hartford, CT metro area was 3.03.
So, a company with cash flows of $150,000 might have an asking price of $454,127. That's only if the firm complies with the local average. Cash flow multiples will usually vary considerably based on many factors.
In case you were wondering what typical cash flows are for a business in West Hartford, BizBuySell.com reports that the median cash flow for West Hartford area businesses was $93,960 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 2.87 and the median cash flow was $87,187.
Tips for West Hartford, CT 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 West Hartford, 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 more information.
Historical Data for West Hartford, CT Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses for sale in the Hartford-West Hartford-East Hartford, CT metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the West Hartford area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the West Hartford area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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