Q1 2009 Costs to Buy a Business
How Much Is My Baytown Business Worth?
We just received the latest Baytown, Texas business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Baytown, TX
According to statistics issued by BizBuySell.com, Baytown business-for-sale listings in Q1 2009 had a median asking price of $295,000.
That compares to a median ask price of $221,500 in Q1 2008. Because the median ask price for businesses for sale in Baytown has risen year over year, we can conclude that many smaller firms in Baytown are holding off on selling.
Please understand that this is the median asking price for a business. If you want to buy a business, you may be able to buy a Baytown company for much less. However, some Baytown businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Baytown business. When a business owner lists a company for sale, they typically set a price that ends up being more than the ultimate sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it depends on deal specifics. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Baytown Businesses for Sale in the Dataset
The study data comprised 505 listings in the Houston-Sugar Land-Baytown, TX metro area. As such, some of the businesses used to derive the median valuation might be outside of Baytown, but they are nearby and so are probably representative of Baytown business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Baytown spanned 572 listings. The downward trend in the number of Baytown business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Baytown, TX
In the Houston-Sugar Land-Baytown, TX metro area, companies will typically sell for 1.07 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 $214,968. Remember, however, that this is just 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 $410,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 1.07 and the median revenue for listed businesses was $346,667.
Q1 2009 Cash Flow Multiples In Baytown, TX
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Houston-Sugar Land-Baytown, TX metro area was 3.65.
So, a firm with cash flows of $150,000 might have an asking price of $548,081. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
If you are interested in what cash flows are for a business in Baytown, BizBuySell.com found that the median cash flow for Baytown area businesses was $105,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.56 and the median cash flow was $93,942.
Things to Consider When Selling a Business in Baytown, TX
When selling a business, think about how dependent the business is on you as the business owner. If the business is heavily dependent on your skills and your personal reputation, a buyer will pay less money for it. As such, it's important to make the business less dependent on you as you approach the time when you hope to sell. This advice on how to sell a company comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Baytown, TX Businesses
If you are contemplating buying a business or selling a business and would like to look at comparables in the area, 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 more information.
Historical Data for Baytown, TX Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Houston-Sugar Land-Baytown, TX metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Baytown area, based on BizBuySell.com's economic data.
Here is how cash flow multiples are trending in the Baytown area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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