Buying a Business

Cost to Buy a Business in Wilmington

Considering purchasing a company in Wilmington, Delaware? You're no doubt wondering how much a typical Wilmington, Delaware business costs to buy.

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

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 want to buy a company in Delaware, take a look at the BizBuySell Delaware listings to see the latest business-for-sale listings for Wilmington and other Delaware municipalities.

Business Valuations in Wilmington, DE

According to BizBuySell.com, the median asking price for an Wilmington business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $275,000.

That was based on 955 listings in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area. Many of the businesses in the dataset are outside of Wilmington, but they are in the area and so are likely representative of Wilmington 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 Wilmington business for much less. At the same time, some Wilmington businesses may cost much more.

Another thing you should know is that this is the asking price for an Wilmington business. Typically, when a small business owner lists a company for sale, they start with an asking price that is higher than the final 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 for sale in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area for the last 8 quarters.

Quarter
Median Ask
Q1 2007
$225,000
Q2 2007
$225,000
Q3 2007
$246,950
Q4 2007
$250,000
Q1 2008
$250,000
Q2 2008
$260,000
Q3 2008
$260,000
Q4 2008
$275,000

Revenue Multiples In Wilmington, DE

In the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area, businesses will usually sell for 0.90 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 firm with revenues of $200,000 might list for $179,130. Remember, however, that this is just an average for revenue multiples in the area. Some entities will have higher revenue multiples and others will have lower revenue multiples.

Here is how median revenue multiples are trending in the Wilmington area, based on BizBuySell.com's quarterly reports.

Quarter
Revenue Multiple
Q1 2007
0.81
Q2 2007
0.79
Q3 2007
0.85
Q4 2007
0.83
Q1 2008
0.87
Q2 2008
0.91
Q3 2008
0.89
Q4 2008
0.90

According to BizBuySell.com, the median revenues for its business-for-sale listings was $425,000 in Q4 2008.

Cash Flow Multiples In Wilmington, DE

Another useful technique to value a business is through cash flow multiples.

For Q4 2008, the average cash flow multiple for listed businesses in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area was 3.31.

So, a company with cash flows of $120,000 might have an asking price of $396,623. That's if the business fits the area average. Most businesses will not conform to industry- or area averages.

Here is how cash flow multiples are trending in the Wilmington area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
3.14
Q2 2007
3.03
Q3 2007
3.14
Q4 2007
3.16
Q1 2008
3.22
Q2 2008
3.41
Q3 2008
3.31
Q4 2008
3.31

If you are interested in what cash flows are for a business in Wilmington, BizBuySell.com reports that the median cash flow for Wilmington area businesses was $109,000 in Q4 2008.

Things to Consider When Buying a Business in Wilmington, DE

Bidding too little for a company is a bad strategy. Lowball bids are very rarely accepted. By making too low of a bid for a business, you risk offending the seller and ruining your chances of completing a deal. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Wilmington, DE Businesses

If you have a specific business in mind and want to value the business, 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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