Q1 2009 Costs to Buy a Business

How Much Is My Long Island Business Worth?

Every quarter, BizBuySell.com published business valuation data, and we now have their latest Long Island, New York business valuation data for First Quarter 2009.

Q1 2009 Business Valuations in Long Island, NY

According to statistics issued by BizBuySell.com, Long Island business-for-sale listings in Q1 2009 had a median asking price of $250,000.

That compares to a median ask price of $250,000 in Q1 2008. In spite of the difficult economy, Long Island, NY business valuations appear to be relatively stable.

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 Long Island company for much less. However, some Long Island businesses may be selling for much more.

Also, this is the asking price for a Long Island business. When an entrepreneur lists a business for sale, they typically set a price that ends up being more than the eventual sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. As an example, a company listed for $125,000 would often sell for between $106,250 and $112,500.

Number of Long Island Businesses for Sale in the Dataset

The study data comprised 4939 listings in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area. As such, some of the businesses used to derive the median valuation might be outside of Long Island, but they are in the area and so are probably representative of Long Island business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for Long Island spanned 5314 listings. The downward trend in the number of Long Island business-for-sale listings is indicative of the current down economy.

Long Island, NY Q1 2009 Revenue Multiples

In the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area, small businesses will typically sell for 0.82 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 $164,170. Remember, however, that this is strictly 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 $450,000 in Q1 2009.

As a reference point, the Q1 2008 revenue multiple was 0.87 and the median revenue for listed businesses was $414,635.

Q1 2009 Cash Flow Multiples In Long Island, NY

Cash flow multiples are another common way to value a business.

For Q1 2009, the average cash flow multiple for businesses listed in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area was 2.91.

So, a business with cash flows of $150,000 might have an asking price of $437,122. 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 Long Island, BizBuySell.com reports that the median cash flow for Long Island area businesses was $120,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 2.94 and the median cash flow was $113,686.

Tips for Long Island, NY 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 Long Island, NY 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 Long Island, NY Business Valuations

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$268,500
Q2 2007
$250,000
Q3 2007
$250,000
Q4 2007
$250,000
Q1 2008
$250,000
Q2 2008
$257,000
Q3 2008
$250,000
Q4 2008
$250,000
Q1 2009
$250,000

Here is how median revenue multiples are trending in the Long Island area, based on BizBuySell.com's quarterly reports.

Quarter
Revenue Multiple
Q1 2007
0.87
Q2 2007
0.83
Q3 2007
0.88
Q4 2007
0.87
Q1 2008
0.87
Q2 2008
0.87
Q3 2008
0.84
Q4 2008
0.83
Q1 2009
0.82

The table below shows how cash flow multiples are trending in the Long Island area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
2.95
Q2 2007
2.94
Q3 2007
2.99
Q4 2007
2.95
Q1 2008
2.94
Q2 2008
2.94
Q3 2008
2.91
Q4 2008
2.91
Q1 2009
2.91

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