Buying a Business
Cost to Buy a Business in Winston-Salem
Planning on buying a Winston-Salem, North Carolina business? You're no doubt wondering how much a typical Winston-Salem, North Carolina business costs to buy.
Fortunately, the team at BizBuySell.com has made some data available on what it costs to buy a business in Winston-Salem.
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 North Carolina, check out the BizBuySell North Carolina listings to see the latest business-for-sale listings for Winston-Salem and other North Carolina towns.
Business Valuations in Winston-Salem, NC
According to BizBuySell.com, the median asking price for an Winston-Salem business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $225,000.
That was based on 23 listings in the Winston-Salem, NC metro area. As such, some of the businesses used to derive the median valuation might be outside of Winston-Salem, but they are in the area and so are probably representative of Winston-Salem 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 Winston-Salem business for much less. At the same time, some Winston-Salem businesses may cost much more.
Importantly, this is the asking price for an Winston-Salem business. Typically, when a small business owner lists a company 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. 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 in the Winston-Salem, NC metro area for the last 8 quarters.
Revenue Multiples In Winston-Salem, NC
In the Winston-Salem, NC metro area, small businesses will typically sell for 0.53 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 $105,891. Remember, however, that this is in fact an average for revenue multiples in Winston-Salem 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 Winston-Salem area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $512,000 in Q4 2008.
Cash Flow Multiples In Winston-Salem, NC
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Winston-Salem, NC metro area was 2.77.
So, a company with cash flows of $120,000 might have an asking price of $332,167. 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 Winston-Salem area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Winston-Salem, BizBuySell.com reports that the median cash flow for Winston-Salem area businesses was $80,378 in Q4 2008.
Things to Consider When Buying a Business in Winston-Salem, NC
If you are interested in buying an existing business, you want the business broker you are working with to be selling you to the seller. As such, it's important that you demonstrate that you're a qualified, motivated buyer. Being prepared and serious about your search is an important initial step. This advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Winston-Salem, NC 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 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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