Q1 2009 Costs to Buy a Business
How Much Is My Albuquerque Business Worth?
We just received the latest Albuquerque, New Mexico statistics on business valuations for First Quarter 2009.
Q1 2009 Business Valuations in Albuquerque, NM
According to statistics issued by BizBuySell.com, Albuquerque business-for-sale listings in Q1 2009 had a median asking price of $350,000.
That compares to a median ask price of $298,000 in Q1 2008. With median asking prices for Albuquerque, NM businesses for sale trending up, we can conclude that only businesses that know they can command a premium price are willing to sell in this tough market.
To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Albuquerque company for much less. Similarly, some Albuquerque businesses may be selling for much more.
Also, this is the asking price for a Albuquerque business. When a business owner lists a business for sale, they typically set a price that ends up being more than the final sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. If an owner lists a business for $150,000, it might end up selling for between $127,500 and $135,000.
Number of Albuquerque Businesses for Sale in the Dataset
The study data comprised 63 listings in the Albuquerque, NM metro area. As such, some of the businesses used to derive the median valuation might be outside of Albuquerque, but they are close by and so are likely representative of Albuquerque business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Albuquerque spanned 70 listings. The downward trend in the number of Albuquerque business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Albuquerque, NM
In the Albuquerque, NM metro area, businesses will typically sell for 0.72 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this area of the country.
In other words, a business that has revenues of $200,000 might list for $143,982. Keep in mind that this is just an average for revenue multiples in Albuquerque and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $613,794 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.82 and the median revenue for listed businesses was $493,786.
Q1 2009 Cash Flow Multiples In Albuquerque, NM
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Albuquerque, NM metro area was 3.81.
So, a business with cash flows of $150,000 might have an asking price of $571,390. That calculation is dependent on the business selling for the area's average multiple. In practice, cash flow multiples can vary considerably from one business to another.
If you are interested in what cash flows are for a business in Albuquerque, BizBuySell.com determined that the median cash flow for Albuquerque area businesses was $124,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.10 and the median cash flow was $113,000.
Tips for Albuquerque, NM Business Sellers
Most business sales involve seller financing, especially in this enviroment when credit is tight. You have to finance as much as 70% of the purchase price. Typically, you would structure the deal to be paid off in full within four to five years. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Albuquerque, NM Businesses
If you are contemplating buying a business or selling a business and would like to value a specific business, we suggest you try the BizBuySell.com Business Valuation Tool. You can modify the dataset that creates business valuation estimates to meet your specific criteria. As a bonus, access to the tool is very affordable -- less than $100.
More Information on BizBuySell.com's Quarterly Reports
The BizBuySell Insight Report is published every quarter. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.
Historical Data for Albuquerque, NM Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Albuquerque, NM metro area for the last 9 quarters.
Here is how median revenue multiples are changing in the Albuquerque area, based on BizBuySell.com's data.
The table below shows how cash flow multiples are trending in the Albuquerque area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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