Buying a Business
Cost to Buy a Business in New York
Considering purchasing a company in New York, New York? You're no doubt wondering how much a typical New York, New York business costs to buy.
Fortunately, the team at BizBuySell.com has made some data available on what businesses are going for in New York.
BizBuySell.com is the biggest business-for-sale listings site on the Internet, offering over 50,000 businesses for sale at any given time. 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 New York, check out the BizBuySell New York listings to see the latest business-for-sale listings for New York and other New York towns.
New York, NY Business Valuations
According to BizBuySell.com, the median asking price for an New York business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $250,000.
That was based on 5144 listings in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area. Many of the businesses in the dataset are outside of New York, but they are in the area and so are probably representative of New York business valuations.
Remember 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 New York business for much less. At the same time, some New York businesses may cost much more.
Importantly, this is the asking price for an New York 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 ratio varies considerably but typically might be between 0.85 and 0.90. That means a business listed for $200,000 might be sold for between $170,000 and $180,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area for the last 8 quarters.
Revenue Multiples In New York, NY
In the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area, businesses will typically sell for 0.83 times the selling company's revenues. This 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 $165,072. Keep in mind that this is only an average for revenue multiples in New York and surrounding communities. Some small businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the New York area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $445,000 in Q4 2008.
Cash Flow Multiples In New York, NY
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 New York-Northern New Jersey-Long Island, NY-NJ-PA metro area was 2.91.
So, a company with cash flows of $120,000 might have an asking price of $348,662. That's if the business fits the area average. Most businesses will not conform to industry- or area averages.
The table below shows how cash flow multiples are trending in the New York area, based on BizBuySell.com's quarterly reports.
Flow Multiple
In case you were wondering what typical cash flows are for a business in New York, BizBuySell.com determined that the median cash flow for New York area businesses was $120,000 in Q4 2008.
Things to Consider When Buying a Business in New York, NY
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 New York, NY 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 additional information.
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