Buying a Business
Cost to Buy a Business in Arlington
If you want to buy a business in Arlington, Virginia, you've come to the right place to get statistics and trend data on Arlington, Virginia business-for-sale transactions.
Fortunately, a company called BizBuySell.com has made some data available on what it costs to buy a business in Arlington.
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, peruse the BizBuySell Virginia listings to to be on the inside track with the newest business-for-sale listings for Arlington and other Virginia municipalities.
Business Valuations in Arlington, VA
According to BizBuySell.com, the median asking price for an Arlington 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 Arlington, but they are in the area and so are likely representative of Arlington 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 Arlington business for much less. Having said that, some Arlington businesses may cost much more.
Importantly, this is the asking price for an Arlington business. Typically, when an 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 ratio varies considerably 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 for sale in the Washington-Arlington-Alexandria, DC-VA-MD-WV metro area for the last 8 quarters.
Revenue Multiples In Arlington, VA
In the Washington-Arlington-Alexandria, DC-VA-MD-WV metro area, businesses will usually 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 firm with revenues of $200,000 might list for $149,461. Remember, however, that this is just an average for revenue multiples in Arlington and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Arlington area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $420,000 in Q4 2008.
Cash Flow Multiples In Arlington, VA
Another popular way 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 math only works if the business sells for the area's average multiple. Actual cash flow multiples can vary considerably from one business to another.
The table below shows how cash flow multiples are trending in the Arlington area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Arlington, BizBuySell.com found that the median cash flow for Arlington area businesses was $100,000 in Q4 2008.
Tips for Arlington, VA Business Buyers
When buying a business, always start with a self assessment. Ask yourself why you want to buy a business. What types of work activities do you like and what kind of lifestyle do you want to pursue? Be sure to include your family in the assessment. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Arlington, VA Businesses
If you have a specific business in mind and want to value the business, 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 published on a quarterly basis. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for additional information.
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