Buying a Business
Cost to Buy a Business in Virginia Beach
If you want to buy a business in Virginia Beach, Virginia, your first question will probably be "How much does it cost to buy a business in Virginia Beach?"
The good news is a company called BizBuySell.com has made some data available on what businesses are going for in Virginia Beach.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. Their listings include almost all of the available listings from business brokers nationwide. 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 Virginia, take a look at the BizBuySell Virginia listings to see the latest business-for-sale listings for Virginia Beach and other Virginia towns.
Virginia Beach, VA Business Valuations
According to BizBuySell.com, the median asking price for an Virginia Beach business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $258,750.
That was based on 220 listings in the Virginia Beach-Norfolk-Newport News, VA-NC metro area. As such, some of the businesses used to derive the median valuation might be outside of Virginia Beach, but they are in the area and so are probably representative of Virginia Beach 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 Virginia Beach business for much less. At the same time, some Virginia Beach businesses may cost much more.
Another thing you should know is that this is the asking price for an Virginia Beach business. Typically, when a company 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. Given this industry norm, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Virginia Beach-Norfolk-Newport News, VA-NC metro area for the last 8 quarters.
Revenue Multiples In Virginia Beach, VA
In the Virginia Beach-Norfolk-Newport News, VA-NC metro area, businesses will typically sell for 0.76 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 $152,564. Keep in mind that this is simply an average for revenue multiples in Virginia Beach 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 Virginia Beach area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $402,500 in Q4 2008.
Cash Flow Multiples In Virginia Beach, 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 Virginia Beach-Norfolk-Newport News, VA-NC metro area was 3.20.
So, a business with cash flows of $120,000 might have an asking price of $384,025. That's if the business fits the area average. Cash flow multiples can vary considerably based on many factors.
The table below shows how cash flow multiples are trending in the Virginia Beach area, based on BizBuySell.com's quarterly reports.
Flow Multiple
In case you were wondering what typical cash flows are for a business in Virginia Beach, BizBuySell.com reports that the median cash flow for Virginia Beach area businesses was $100,000 in Q4 2008.
Things to Consider When Buying a Business in Virginia Beach, VA
Don't buy a company simply because you love the type of business. In buying a business, you are buying a livelihood that will need to meet you salary expecations. So, before you move forward, consider how much you can realistically expect to pull out of the business and whether thay will support your desired lifestyle. Always be conservative in making these projections. This helpful business buying counsel comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Virginia Beach, 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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