Buying a Business
Cost to Buy a Business in Fort Worth
Planning on buying a Fort Worth, Texas business? You'd do well to learn a little bit about trends in Fort Worth, Texas business valuations.
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Fort Worth.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. When a business broker in a local city has a listing, the broker will typically post it 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 want to buy a company in Texas, check out the BizBuySell Texas listings to get instant access to business-for-sale listings for Fort Worth and other Texas towns.
Business Valuations in Fort Worth, TX
Based on the BizBuySell.com data, the median asking price for an Fort Worth business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $290,000.
That was based on 923 listings in the Dallas-Fort Worth-Arlington, TX metro area. Many of the businesses in the dataset are outside of Fort Worth, but they are close by and so are probably representative of Fort Worth 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 Fort Worth business for much less. At the same time, some Fort Worth businesses may cost much more.
Another thing you should know is that this is the asking price for an Fort Worth business. Typically, when a company owner lists a company 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 in the Dallas-Fort Worth-Arlington, TX metro area for the last 8 quarters.
Revenue Multiples In Fort Worth, TX
In the Dallas-Fort Worth-Arlington, TX metro area, businesses will usually sell for 0.96 times the selling company's revenues. The data indicates that is 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 $192,320. Remember, however, that this is just an average for revenue multiples in the area. Some businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Fort Worth area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $450,000 in Q4 2008.
Cash Flow Multiples In Fort Worth, TX
Another useful technique to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the Dallas-Fort Worth-Arlington, TX metro area was 3.53.
So, a business with cash flows of $120,000 might have an asking price of $424,089. 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.
The table below shows how cash flow multiples are trending in the Fort Worth area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Fort Worth, BizBuySell.com determined that the median cash flow for Fort Worth area businesses was $111,564 in Q4 2008.
Things to Consider When Buying a Business in Fort Worth, TX
Be sure to assess your financial situation. Be sure to carefully consider how much money you need and how much you want to earn. Your expectations need to be realistic and they must be something that can be achieved by the type of business you are searching for. This excellent business buying tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Fort Worth, TX 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 published on a quarterly basis. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for more information.
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