Q1 2009 Costs to Buy a Business
How Much Is My Greensboro Business Worth?
We just received the latest Greensboro, North Carolina business valuation data for First Quarter 2009.
Greensboro, NC Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Greensboro business-for-sale listings in Q1 2009 had a median asking price of $200,000.
That compares to a median ask price of $220,000 in Q1 2008. Given that Greensboro, NC median business asking prices appear to be dropping, it suggests that larger Greensboro businesses in may be holding off on selling until the economy turns around.
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 Greensboro company for much less. Alternatively, some Greensboro businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Greensboro business. When a business owner lists a business 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 varies considerably. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Greensboro Businesses for Sale in the Dataset
The study data comprised 65 listings in the Greensboro-High Point, NC metro area. As such, some of the businesses used to derive the median valuation might be outside of Greensboro, but they are in the area and so are probably representative of Greensboro business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Greensboro spanned 81 listings. The downward trend in the number of Greensboro business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Greensboro, NC
In the Greensboro-High Point, NC metro area, companies will usually sell for 0.78 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 $155,837. 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 $390,000 in Q1 2009.
As a reference point, the Q1 2008 revenue multiple was 0.81 and the median revenue for listed businesses was $334,689.
Q1 2009 Cash Flow Multiples In Greensboro, NC
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Greensboro-High Point, NC metro area was 2.85.
So, a company with cash flows of $150,000 might have an asking price of $427,304. That calculation is dependent on the business selling for the area's average multiple. Actual cash flow multiples are based on business specifics.
In case you were wondering what typical cash flows are for a business in Greensboro, BizBuySell.com found that the median cash flow for Greensboro area businesses was $90,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.11 and the median cash flow was $83,500.
Tips for Greensboro, NC Business Sellers
Competitors tend to pay less for a business than strategic buyers. In most cases, selling out to a competitor should be your exit strategy of last resort (although selling to an employee may get an even lower exit price). This good advice comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Greensboro, NC 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 published every quarter. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for additional information.
Historical Data for Greensboro, NC Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Greensboro-High Point, NC metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Greensboro area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Greensboro area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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