Q1 2009 Costs to Buy a Business
How Much Is My Baltimore Business Worth?
We just received the latest Baltimore, Maryland statistics on business valuations for First Quarter 2009.
Baltimore, MD Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Baltimore business-for-sale listings in Q1 2009 had a median asking price of $250,000.
That compares to a median ask price of $275,000 in Q1 2008. Given that Baltimore, MD median business asking prices appear to be dropping, it suggests that larger Baltimore businesses in may be holding off on selling until the economy turns around.
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 Baltimore company for much less. However, some Baltimore businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Baltimore business. When an entrepreneur lists a company for sale, they typically set a price that ends up being more than the contracted sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Baltimore Businesses for Sale in the Dataset
The study data comprised 285 listings in the Baltimore-Towson, MD metro area. As such, some of the businesses used to derive the median valuation might be outside of Baltimore, but they are close by and so are probably representative of Baltimore business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Baltimore spanned 311 listings. The downward trend in the number of Baltimore business-for-sale listings is indicative of the current down economy.
Baltimore, MD Q1 2009 Revenue Multiples
In the Baltimore-Towson, MD metro area, companies 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 $143,727. Keep in mind that this is in fact an average for revenue multiples in the area. 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 $420,000 in Q1 2009.
As a reference point, the Q1 2008 revenue multiple was 0.84 and the median revenue for listed businesses was $439,000.
Q1 2009 Cash Flow Multiples In Baltimore, MD
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the Baltimore-Towson, MD metro area was 3.11.
So, a firm with cash flows of $150,000 might have an asking price of $465,803. That's only if the firm complies with the local average. Actual cash flow multiples are based on business specifics.
If you are interested in what cash flows are for a business in Baltimore, BizBuySell.com reports that the median cash flow for Baltimore area businesses was $100,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.36 and the median cash flow was $100,000.
Tips for Baltimore, MD Business Sellers
Buyers pay more for certainty than for uncertainty, especially when it comes to future cash flows. So, think about ways to lock in future cash flows for a prospective buyer and, if it can be done, you'll then be able to command a higher sale price for your business. This useful tip for selling a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Baltimore, MD Businesses
If you are contemplating buying a business or selling a business and would like to find out how much a business is worth, 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 a nationally-recognized economic report that tracks trends in the business-for-sale marketplace. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for additional information.
Historical Data for Baltimore, MD Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Baltimore-Towson, MD metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Baltimore area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Baltimore area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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