Q1 2009 Costs to Buy a Business

How Much Is My Milford Business Worth?

We just received the latest Milford, Connecticut statistics on business valuations for First Quarter 2009.

Q1 2009 Business Valuations in Milford, CT

According to statistics issued by BizBuySell.com, Milford business-for-sale listings in Q1 2009 had a median asking price of $195,000.

That compares to a median ask price of $183,900 in Q1 2008. Because the median ask price for businesses for sale in Milford has risen year over year, we can conclude that many smaller firms in Milford are holding off on selling.

To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Milford company for much less. However, some Milford businesses may be selling for much more.

Another thing to remember is that this is the asking price for a Milford business. When a business owner lists a company for sale, they typically set a price that ends up being more than the contracted sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. If an owner lists a business for $150,000, it might end up selling for between $127,500 and $135,000.

Number of Milford Businesses for Sale in the Dataset

The study data comprised 134 listings in the New Haven-Milford, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of Milford, but they are in the area and so are probably representative of Milford business valuations.

In Q1 2008, just one year ago, there were 145 Milford listings in the BizBuySell.com dataset. As a result of the recession, fewer Milford business owners are selling because they hope to weather the storm and sell after the economy turns around.

Q1 2009 Revenue Multiples In Milford, CT

In the New Haven-Milford, CT metro area, businesses will typically sell for 0.64 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this metro area.

In other words, a business that has revenues of $200,000 might list for $128,548. Remember, however, that this is just an average for revenue multiples in the area. Some 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 $360,250 in Q1 2009.

To put this in perspective, the Q1 2008 revenue multiple was 0.76 and the median revenue for listed businesses was $300,000.

Q1 2009 Cash Flow Multiples In Milford, CT

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 Haven-Milford, CT metro area was 2.94.

So, a business with cash flows of $150,000 might have an asking price of $441,221. 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 Milford, BizBuySell.com reports that the median cash flow for Milford area businesses was $97,790 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.04 and the median cash flow was $78,000.

Things to Consider When Selling a Business in Milford, CT

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 Milford, CT 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 more information.

Historical Data for Milford, CT 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 New Haven-Milford, CT metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$189,000
Q2 2007
$189,000
Q3 2007
$175,000
Q4 2007
$179,000
Q1 2008
$183,900
Q2 2008
$181,900
Q3 2008
$175,000
Q4 2008
$175,000
Q1 2009
$195,000

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

Quarter
Revenue Multiple
Q1 2007
0.74
Q2 2007
0.80
Q3 2007
0.73
Q4 2007
0.76
Q1 2008
0.76
Q2 2008
0.73
Q3 2008
0.71
Q4 2008
0.70
Q1 2009
0.64

Here is how cash flow multiples are trending in the Milford area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
3.11
Q2 2007
2.99
Q3 2007
3.03
Q4 2007
3.01
Q1 2008
3.04
Q2 2008
2.85
Q3 2008
2.77
Q4 2008
2.84
Q1 2009
2.94

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