Buying a Business

Cost to Buy a Business in Alexandria

Planning on buying a Alexandria, Virginia business? Your first question will probably be "How much does it cost to buy a business in Alexandria?"

Fortunately, the team at BizBuySell.com has made some data available on what it costs to buy a business in Alexandria.

BizBuySell.com is the largest online marketplace for business-for-sale transactions. The vast majority of business brokers in the country put their business listings on BizBuySell.com. In addition, many business owners who are selling on their own, without a broker, will place listings on BizBuySell.com.

If you are looking to buy a business in Virginia, check out the BizBuySell Virginia listings to see the latest business-for-sale listings for Alexandria and other Virginia towns.

Business Valuations in Alexandria, VA

According to BizBuySell.com, the median asking price for an Alexandria business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $250,000.

That was based on 908 listings in the Washington-Arlington-Alexandria, DC-VA-MD-WV metro area. Many of the businesses in the dataset are outside of Alexandria, but they are in the area and so are probably representative of Alexandria business valuations.

Note that this is the median asking price for a business. If you are in the market to buy a company, you may be able to buy an Alexandria business for much less. At the same time, some Alexandria businesses may cost much more.

Importantly, this is the asking price for an Alexandria business. Typically, when a small business owner lists a business for sale, they start with an asking price that is higher than the eventual sale price. The sale-price-to-asking-price ratios depend on deal specifics but typically might be between 0.85 and 0.90. In other words, a business listed for $100,000 might sell for between $85,000 and $90,000.

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Washington-Arlington-Alexandria, DC-VA-MD-WV metro area for the last 8 quarters.

Quarter
Median Ask
Q1 2007
$250,000
Q2 2007
$250,000
Q3 2007
$250,000
Q4 2007
$250,000
Q1 2008
$250,000
Q2 2008
$250,000
Q3 2008
$250,000
Q4 2008
$250,000

Revenue Multiples In Alexandria, VA

In the Washington-Arlington-Alexandria, DC-VA-MD-WV metro area, businesses will typically sell for 0.75 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this area of the country.

In other words, a business that has revenues of $200,000 might list for $149,461. 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.

Here is how median revenue multiples are trending in the Alexandria area, based on BizBuySell.com's quarterly reports.

Quarter
Revenue Multiple
Q1 2007
0.75
Q2 2007
0.77
Q3 2007
0.75
Q4 2007
0.76
Q1 2008
0.72
Q2 2008
0.70
Q3 2008
0.71
Q4 2008
0.75

According to BizBuySell.com, the median revenues for its business-for-sale listings was $420,000 in Q4 2008.

Cash Flow Multiples In Alexandria, VA

Another common method to value a business is through cash flow multiples.

For Q4 2008, the average cash flow multiple for listed businesses in the Washington-Arlington-Alexandria, DC-VA-MD-WV metro area was 3.08.

So, a business with cash flows of $120,000 might have an asking price of $369,520. That's if the business fits the area average. The distribution on revenue multiples for a given set of businesses can be quite wide-ranging.

Here is how cash flow multiples are trending in the Alexandria area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
3.19
Q2 2007
3.15
Q3 2007
3.14
Q4 2007
3.12
Q1 2008
3.13
Q2 2008
3.02
Q3 2008
2.98
Q4 2008
3.08

If you are interested in what cash flows are for a business in Alexandria, BizBuySell.com reports that the median cash flow for Alexandria area businesses was $100,000 in Q4 2008.

Things to Consider When Buying a Business in Alexandria, VA

If you are looking to buy a business, be sure to contact business intermediaries who represent selling businesses within your targeted market. They will notify you of available companies that meet your criteria and qualifications. Most business brokers or intermediaries work for the seller and are paid by the seller. That means you can enjoy the luxury of their services at no cost. This helpful advice was provided by Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Alexandria, VA Businesses

If you have a specific business in mind and want to look at comparables in the area, we recommend the BizBuySell.com Business Valuation Tool. You can refine the dataset that generates business valuations to meet your specific needs, and 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 indicator that tracks the health of the U.S. small business economy. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for more information.

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