Q1 2009 Costs to Buy a Business
How Much Is My High Point Business Worth?
We just received the latest High Point, North Carolina business valuation data for First Quarter 2009.
High Point, NC Q1 2009 Business Valuations
Based on data compiled by BizBuySell.com, High Point 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. One interpretation of the lower median asking price is that High Point, NC sellers are dropping their asking prices in light of market conditions.
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 High Point company for much less. Similarly, some High Point businesses may be selling for much more.
Another thing to remember is that this is the asking price for a High Point business. When a company 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 High Point 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 High Point, but they are in the area and so are likely representative of High Point business valuations.
In Q1 2008, just one year ago, there were 81 High Point listings in the BizBuySell.com dataset. As a result of the recession, fewer High Point business owners are selling because they hope to weather the storm and sell after the economy turns around.
Q1 2009 Revenue Multiples In High Point, NC
In the Greensboro-High Point, NC metro area, small businesses 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. Keep in mind that this is simply 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.
To put this in perspective, the Q1 2008 revenue multiple was 0.81 and the median revenue for listed businesses was $334,689.
Q1 2009 Cash Flow Multiples In High Point, NC
Cash flow multiples are another common way 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 business 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. Most businesses will not conform to industry- or area averages.
If you are interested in what cash flows are for a business in High Point, BizBuySell.com reports that the median cash flow for High Point 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.
Things to Consider When Selling a Business in High Point, NC
Most business sales involve seller financing, especially in this enviroment when credit is tight. You have to finance as much as 70% of the purchase price. Typically, you would structure the deal to be paid off in full within four to five years. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for High Point, 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 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 High Point, NC Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses for sale in the Greensboro-High Point, NC metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the High Point area, based on BizBuySell.com's economic data.
The table below shows how cash flow multiples are trending in the High Point area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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