Q1 2009 Costs to Buy a Business

How Much Is My Atlanta Business Worth?

Every quarter, BizBuySell.com published business valuation data, and we now have their latest Atlanta, Georgia business valuation data for First Quarter 2009.

Q1 2009 Business Valuations in Atlanta, GA

According to statistics issued by BizBuySell.com, Atlanta business-for-sale listings in Q1 2009 had a median asking price of $249,000.

That compares to a median ask price of $250,000 in Q1 2008. One interpretation of the lower median asking price is that Atlanta, GA sellers are dropping their asking prices in light of market conditions.

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 Atlanta company for much less. Alternatively, some Atlanta businesses may be selling for much more.

Another thing to remember is that this is the asking price for a Atlanta business. When a business owner lists a company 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. That means a company listed for $200,000 might be sold for between $170,000 and $180,000.

Number of Atlanta Businesses for Sale in the Dataset

The study data comprised 929 listings in the Atlanta-Sandy Springs-Marietta, GA metro area. As such, some of the businesses used to derive the median valuation might be outside of Atlanta, but they are in the area and so are probably representative of Atlanta business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for Atlanta spanned 969 listings. The downward trend in the number of Atlanta business-for-sale listings is indicative of the current down economy.

Q1 2009 Revenue Multiples In Atlanta, GA

In the Atlanta-Sandy Springs-Marietta, GA metro area, businesses will typically sell for 0.98 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 $195,955. Remember, however, that this is in fact an average for revenue multiples in Atlanta 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 $375,114 in Q1 2009.

To put this in perspective, the Q1 2008 revenue multiple was 1.02 and the median revenue for listed businesses was $358,208.

Q1 2009 Cash Flow Multiples In Atlanta, GA

Cash flow multiples are another common way to value a business.

For Q1 2009, the average cash flow multiple for businesses listed in the Atlanta-Sandy Springs-Marietta, GA metro area was 3.52.

So, a firm with cash flows of $150,000 might have an asking price of $528,425. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.

In case you were wondering what typical cash flows are for a business in Atlanta, BizBuySell.com reports that the median cash flow for Atlanta area businesses was $100,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.56 and the median cash flow was $94,823.

Things to Consider When Selling a Business in Atlanta, GA

Buyers want a business that is easy to understand and easy to run. Prior to selling a business, be sure to prepare a thorough operations manual that explains in detail how a new buyer would run the business. This helpful advice on how to buy a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.

Business Valuations for Atlanta, GA 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 Atlanta, GA Business Valuations

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Atlanta-Sandy Springs-Marietta, GA metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$230,000
Q2 2007
$240,000
Q3 2007
$245,000
Q4 2007
$249,000
Q1 2008
$250,000
Q2 2008
$250,000
Q3 2008
$235,000
Q4 2008
$239,500
Q1 2009
$249,000

Here is how median revenue multiples are trending in the Atlanta area, based on BizBuySell.com's economic data.

Quarter
Revenue Multiple
Q1 2007
1.07
Q2 2007
0.98
Q3 2007
1.03
Q4 2007
1.00
Q1 2008
1.02
Q2 2008
1.02
Q3 2008
0.99
Q4 2008
1.01
Q1 2009
0.98

The table below shows how cash flow multiples are trending in the Atlanta area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
3.64
Q2 2007
3.47
Q3 2007
3.68
Q4 2007
3.57
Q1 2008
3.56
Q2 2008
3.62
Q3 2008
3.53
Q4 2008
3.51
Q1 2009
3.52

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