Q1 2009 Costs to Buy a Business
How Much Is My Cincinnati Business Worth?
We just received the latest Cincinnati, Ohio business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Cincinnati, OH
According to statistics issued by BizBuySell.com, Cincinnati business-for-sale listings in Q1 2009 had a median asking price of $272,000.
That compares to a median ask price of $225,000 in Q1 2008. With median asking prices for Cincinnati, OH 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.
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 Cincinnati company for much less. However, some Cincinnati businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Cincinnati business. When a company 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. Given this industry statistic, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
Number of Cincinnati Businesses for Sale in the Dataset
The study data comprised 108 listings in the Cincinnati-Middletown, OH-KY-IN metro area. As such, some of the businesses used to derive the median valuation might be outside of Cincinnati, but they are in the area and so are likely representative of Cincinnati business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Cincinnati spanned 123 listings. The downward trend in the number of Cincinnati business-for-sale listings is indicative of the current down economy.
Cincinnati, OH Q1 2009 Revenue Multiples
In the Cincinnati-Middletown, OH-KY-IN metro area, businesses will typically sell for 0.81 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 $162,240. Keep in mind that this is in fact an average for revenue multiples in the area. Some small businesses 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 $440,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.75 and the median revenue for listed businesses was $430,000.
Q1 2009 Cash Flow Multiples In Cincinnati, OH
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Cincinnati-Middletown, OH-KY-IN metro area was 4.18.
So, a company with cash flows of $150,000 might have an asking price of $627,080. That calculation is dependent on the business selling for the area's average multiple. Cash flow multiples will usually vary considerably based on many factors.
If you are interested in what cash flows are for a business in Cincinnati, BizBuySell.com reports that the median cash flow for Cincinnati area businesses was $83,500 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.70 and the median cash flow was $80,000.
Things to Consider When Selling a Business in Cincinnati, OH
When selling a business, valuations will be based on your profits. So, be sure to sell a business at a point when your profits are doing well if you want to sell for a great price. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Cincinnati, OH 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 Cincinnati, OH Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Cincinnati-Middletown, OH-KY-IN metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Cincinnati area, based on BizBuySell.com's data.
The table below shows how cash flow multiples are trending in the Cincinnati area, based on BizBuySell.com's quarterly reports.
Flow Multiple
Share this article
Additional Resources for Entrepreneurs