Q1 2009 Costs to Buy a Business
How Much Is My Wichita Business Worth?
Every quarter, BizBuySell.com published business valuation data, and we now have their latest Wichita, Kansas business-for-sale statistics.
Q1 2009 Business Valuations in Wichita, KS
According to statistics issued by BizBuySell.com, Wichita business-for-sale listings in Q1 2009 had a median asking price of $231,500.
That compares to a median ask price of $373,000 in Q1 2008. One interpretation of the lower median asking price is that Wichita, KS sellers are dropping their asking prices in light of market conditions.
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 Wichita company for much less. Alternatively, some Wichita businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Wichita business. When a 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 depends on deal specifics. In practice, this means a business listed for $250,000 would go for between $212,500 and $225,000.
Number of Wichita Businesses for Sale in the Dataset
The study data comprised 34 listings in the Wichita, KS metro area. Many of the businesses in the dataset are outside of Wichita, but they are nearby and so are probably representative of Wichita business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Wichita spanned 19 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Wichita business-for-sale listings.
Q1 2009 Revenue Multiples In Wichita, KS
In the Wichita, KS metro area, companies will typically sell for 0.80 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 business that has revenues of $200,000 might list for $160,266. Keep in mind that this is just an average for revenue multiples in Wichita and surrounding communities. 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 $458,514 in Q1 2009.
As a reference point, the Q1 2008 revenue multiple was 0.88 and the median revenue for listed businesses was $582,377.
Q1 2009 Cash Flow Multiples In Wichita, KS
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Wichita, KS metro area was 3.30.
So, a business with cash flows of $150,000 might have an asking price of $495,508. That's only if the firm complies with the local average. The actual distribution on revenue multiples for a given set of businesses can be quite wide-ranging.
If you are interested in what cash flows are for a business in Wichita, BizBuySell.com reports that the median cash flow for Wichita area businesses was $97,038 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.66 and the median cash flow was $99,299.
Things to Consider When Selling a Business in Wichita, KS
When setting a price for a business, it's worthwhile to invest in a professional valuation. If you define the business selling price without a professional valuation, you may end up leaving money on the table or having an unrealistic price that prevents a deal from ever getting done. This helpful tip on buying a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Wichita, KS Businesses
If you are contemplating buying a business or selling a business and would like to find out how much a business is worth, 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 Wichita, KS Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Wichita, KS metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Wichita area, based on BizBuySell.com's economic data.
Here is how cash flow multiples are trending in the Wichita area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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