Buying a Business

Cost to Buy a Business in Niagara Falls

Considering purchasing a company in Niagara Falls, New York? You're no doubt wondering how much a typical Niagara Falls, New York business costs to buy.

Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Niagara Falls.

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. They also have many FSBO (for sale by owner) business-for-sale listings.

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 Niagara Falls and other New York towns.

Niagara Falls, NY Business Valuations

According to BizBuySell.com, the median asking price for an Niagara Falls business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $355,000.

That was based on 49 listings in the Buffalo-Niagara Falls, NY metro area. As such, some of the businesses used to derive the median valuation might be outside of Niagara Falls, but they are in the area and so are probably representative of Niagara Falls 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 Niagara Falls business for much less. At the same time, some Niagara Falls businesses may cost much more.

Importantly, this is the asking price for an Niagara Falls business. Typically, when a business owner lists a business for sale, they start with an asking price that is higher than the ultimate 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 companies in the Buffalo-Niagara Falls, NY metro area for the last 8 quarters.

Quarter
Median Ask
Q1 2007
$195,000
Q2 2007
$199,000
Q3 2007
$215,000
Q4 2007
$250,000
Q1 2008
$235,000
Q2 2008
$250,000
Q3 2008
$197,500
Q4 2008
$355,000

Revenue Multiples In Niagara Falls, NY

In the Buffalo-Niagara Falls, NY metro area, businesses will typically sell for 1.11 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 firm with revenues of $200,000 might list for $221,126. Remember, however, that this is just an average for revenue multiples in Niagara Falls and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.

Here is how median revenue multiples are changing in the Niagara Falls area, based on BizBuySell.com's data.

Quarter
Revenue Multiple
Q1 2007
0.85
Q2 2007
0.87
Q3 2007
0.98
Q4 2007
0.82
Q1 2008
0.73
Q2 2008
1.02
Q3 2008
1.24
Q4 2008
1.11

According to BizBuySell.com, the median revenues for its business-for-sale listings was $317,000 in Q4 2008.

Cash Flow Multiples In Niagara Falls, NY

Another popular way to value a business is through cash flow multiples.

For Q4 2008, the average cash flow multiple for businesses listed in the Buffalo-Niagara Falls, NY metro area was 3.59.

So, a company with cash flows of $120,000 might have an asking price of $431,373. 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 Niagara Falls area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
2.43
Q2 2007
2.90
Q3 2007
3.47
Q4 2007
3.86
Q1 2008
3.77
Q2 2008
3.84
Q3 2008
3.31
Q4 2008
3.59

If you are interested in what cash flows are for a business in Niagara Falls, BizBuySell.com reports that the median cash flow for Niagara Falls area businesses was $97,000 in Q4 2008.

Tips for Niagara Falls, NY Business Buyers

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 Niagara Falls, NY Businesses

If you have a specific business in mind and want to find out how much a business is worth, 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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