Q1 2009 Costs to Buy a Business
How Much Is My Riverside Business Worth?
We just received the latest Riverside, California statistics on business valuations for First Quarter 2009.
Q1 2009 Business Valuations in Riverside, CA
Based on data compiled by BizBuySell.com, Riverside business-for-sale listings in Q1 2009 had a median asking price of $249,000.
That compares to a median ask price of $275,000 in Q1 2008. Given that Riverside, CA median business asking prices appear to be dropping, it suggests that larger Riverside businesses in may be holding off on selling until the economy turns around.
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 Riverside company for much less. Similarly, some Riverside businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Riverside business. When a business owner lists a business for sale, they typically set a price that ends up being more than the final sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. Given this industry statistic, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
Number of Riverside Businesses for Sale in the Dataset
The study data comprised 601 listings in the Riverside-San Bernardino-Ontario, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Riverside, but they are nearby and so are probably representative of Riverside business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Riverside spanned 620 listings. The downward trend in the number of Riverside business-for-sale listings is indicative of the current down economy.
Riverside, CA Q1 2009 Revenue Multiples
In the Riverside-San Bernardino-Ontario, CA metro area, businesses will typically sell for 0.81 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 $162,436. Remember, however, that this is just an average for revenue multiples in the area. Some companies 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 $435,000 in Q1 2009.
To give this some context, the Q1 2008 revenue multiple was 0.83 and the median revenue for listed businesses was $500,000.
Q1 2009 Cash Flow Multiples In Riverside, CA
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Riverside-San Bernardino-Ontario, CA metro area was 3.16.
So, a business with cash flows of $150,000 might have an asking price of $473,375. That's only if the firm complies with the local average. Cash flow multiples will usually vary considerably based on many factors.
If you are interested in what cash flows are for a business in Riverside, BizBuySell.com reports that the median cash flow for Riverside area businesses was $100,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.25 and the median cash flow was $107,326.
Tips for Riverside, CA Business Sellers
Don't assume that the price you initially negotiate with a buyer will stay the same all the way to closing. During due diligence, the buyer may find some blemishes on the businesses that lead them to lower their offer. This is a natural part of the process and should be expected. This helpful business selling tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Riverside, CA 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 Riverside, CA 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 Riverside-San Bernardino-Ontario, CA metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Riverside area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Riverside area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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