Q1 2009 Costs to Buy a Business
How Much Is My Wilmington Business Worth?
We just received the latest Wilmington, Delaware business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Wilmington, DE
According to statistics issued by BizBuySell.com, Wilmington business-for-sale listings in Q1 2009 had a median asking price of $290,000.
That compares to a median ask price of $250,000 in Q1 2008. Because the median ask price for businesses for sale in Wilmington has risen year over year, we can conclude that many smaller firms in Wilmington are holding off on 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 Wilmington company for much less. However, some Wilmington businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Wilmington business. When a business owner lists a business 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 depends on deal specifics. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Wilmington Businesses for Sale in the Dataset
The study data comprised 931 listings in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area. Many of the businesses in the dataset are outside of Wilmington, but they are in the area and so are likely representative of Wilmington business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Wilmington spanned 963 listings. The downward trend in the number of Wilmington business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Wilmington, DE
In the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area, businesses will typically sell for 0.87 times the selling company's revenues. The data indicates that is 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 $174,719. Remember, however, that this is only 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 $438,520 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.87 and the median revenue for listed businesses was $375,000.
Q1 2009 Cash Flow Multiples In Wilmington, DE
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area was 3.32.
So, a business with cash flows of $150,000 might have an asking price of $498,133. 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 Wilmington, BizBuySell.com found that the median cash flow for Wilmington area businesses was $110,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.22 and the median cash flow was $100,000.
Things to Consider When Selling a Business in Wilmington, DE
Competitors tend to pay less for a business than strategic buyers. In most cases, selling out to a competitor should be your exit strategy of last resort (although selling to an employee may get an even lower exit price). This good advice comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Wilmington, DE 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 additional information.
Historical Data for Wilmington, DE Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area for the last 9 quarters.
Here is how median revenue multiples are tracking in the Wilmington area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Wilmington area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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