Q1 2009 Costs to Buy a Business

How Much Is My Metairie Business Worth?

Every quarter, BizBuySell.com published business valuation data, and we now have their latest Metairie, Louisiana business-for-sale statistics.

Metairie, LA Q1 2009 Business Valuations

According to statistics issued by BizBuySell.com, Metairie business-for-sale listings in Q1 2009 had a median asking price of $225,000.

That compares to a median ask price of $225,000 in Q1 2008. Metairie, LA business values are showing stability even in this tough economic environment.

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

Another thing to remember is that this is the asking price for a Metairie business. When an owner 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. So, a business listed for $100,000 might sell for between $85,000 and $90,000.

Number of Metairie Businesses for Sale in the Dataset

The study data comprised 88 listings in the New Orleans-Metairie-Kenner, LA metro area. As such, some of the businesses used to derive the median valuation might be outside of Metairie, but they are in the area and so are likely representative of Metairie business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for Metairie spanned 69 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Metairie business-for-sale listings.

Metairie, LA Q1 2009 Revenue Multiples

In the New Orleans-Metairie-Kenner, LA metro area, businesses will typically sell for 1.04 times the selling company's revenues. The data indicates that is 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 $207,400. Remember, however, that this is in fact an average for revenue multiples in Metairie and surrounding communities. 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 $318,784 in Q1 2009.

To give this some context, the Q1 2008 revenue multiple was 0.87 and the median revenue for listed businesses was $325,292.

Q1 2009 Cash Flow Multiples In Metairie, LA

Cash flow multiples are another popular technique to value a business.

For Q1 2009, the average cash flow multiple for listed businesses in the New Orleans-Metairie-Kenner, LA metro area was 3.69.

So, a firm with cash flows of $150,000 might have an asking price of $553,589. 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 Metairie, BizBuySell.com found that the median cash flow for Metairie area businesses was $79,950 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.66 and the median cash flow was $65,000.

Tips for Metairie, LA Business Sellers

When choosing a business broker, look for a broker that can maintain confidentiality and simultaneously get you the most qualified buyers. In addition, make sure the business broker has a good track record in facilitating negotiations between buyer and seller in a way that arrives at the best possible transaction. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.

Business Valuations for Metairie, LA Businesses

If you are contemplating buying a business or selling a business and would like to find out how much a business is worth, 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 Metairie, LA Business Valuations

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the New Orleans-Metairie-Kenner, LA metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$522,500
Q2 2007
$267,500
Q3 2007
$242,500
Q4 2007
$205,000
Q1 2008
$225,000
Q2 2008
$235,000
Q3 2008
$245,000
Q4 2008
$250,000
Q1 2009
$225,000

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

Quarter
Revenue Multiple
Q1 2007
0.73
Q2 2007
0.88
Q3 2007
1.01
Q4 2007
0.86
Q1 2008
0.87
Q2 2008
0.99
Q3 2008
1.01
Q4 2008
1.07
Q1 2009
1.04

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

Quarter
Median Cash
Flow Multiple
Q1 2007
3.31
Q2 2007
3.33
Q3 2007
4.11
Q4 2007
3.83
Q1 2008
3.66
Q2 2008
3.72
Q3 2008
3.83
Q4 2008
3.71
Q1 2009
3.69

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