Buying a Business
Cost to Buy a Business in West Hartford
Considering purchasing a company in West Hartford, Connecticut? You're no doubt wondering how much a typical West Hartford, Connecticut business costs to buy.
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in West Hartford.
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 Connecticut, check out the BizBuySell Connecticut listings to see the latest business-for-sale listings for West Hartford and other Connecticut municipalities.
Business Valuations in West Hartford, CT
According to BizBuySell.com, the median asking price for an West Hartford business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $179,500.
That was based on 206 listings in the Hartford-West Hartford-East Hartford, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of West Hartford, but they are in the area and so are probably representative of West Hartford 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 West Hartford business for much less. At the same time, some West Hartford businesses may cost much more.
Another thing you should know is that this is the asking price for an West Hartford business. Typically, when a 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 ratios depend on deal specifics 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 Hartford-West Hartford-East Hartford, CT metro area for the last 8 quarters.
Revenue Multiples In West Hartford, CT
In the Hartford-West Hartford-East Hartford, CT metro area, companies will typically sell for 0.61 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this part of the country.
In other words, a business that has revenues of $200,000 might list for $121,238. Remember, however, that this is just an average for revenue multiples in West Hartford and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are moving in the West Hartford area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $396,000 in Q4 2008.
Cash Flow Multiples In West Hartford, CT
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 Hartford-West Hartford-East Hartford, CT metro area was 2.74.
So, a business with cash flows of $120,000 might have an asking price of $328,853. 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 West Hartford area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in West Hartford, BizBuySell.com reports that the median cash flow for West Hartford area businesses was $92,673 in Q4 2008.
Things to Consider When Buying a Business in West Hartford, CT
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 West Hartford, CT 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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