Q1 2009 Costs to Buy a Business
How Much Is My Sunnyvale Business Worth?
We just received the latest Sunnyvale, California business-for-sale statistics.
Sunnyvale, CA Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Sunnyvale business-for-sale listings in Q1 2009 had a median asking price of $260,000.
That compares to a median ask price of $249,000 in Q1 2008. With median asking prices for Sunnyvale, CA businesses for sale trending up, we can conclude that only businesses that know they can command a premium price are willing to sell in this tough market.
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 Sunnyvale company for much less. Similarly, some Sunnyvale businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Sunnyvale business. When a small business owner lists a company 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 Sunnyvale Businesses for Sale in the Dataset
The study data comprised 142 listings in the San Jose-Sunnyvale-Santa Clara, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Sunnyvale, but they are in the area and so are likely representative of Sunnyvale business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Sunnyvale spanned 165 listings. The downward trend in the number of Sunnyvale business-for-sale listings is indicative of the current down economy.
Sunnyvale, CA Q1 2009 Revenue Multiples
In the San Jose-Sunnyvale-Santa Clara, CA metro area, small businesses will usually sell for 0.88 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 $176,010. Remember, however, that this is strictly an average for revenue multiples in the area. Some small 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 $406,582 in Q1 2009.
To give this some context, the Q1 2008 revenue multiple was 0.74 and the median revenue for listed businesses was $433,777.
Q1 2009 Cash Flow Multiples In Sunnyvale, CA
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the San Jose-Sunnyvale-Santa Clara, CA metro area was 3.60.
So, a business with cash flows of $150,000 might have an asking price of $539,386. 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 Sunnyvale, BizBuySell.com reports that the median cash flow for Sunnyvale area businesses was $100,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.35 and the median cash flow was $100,000.
Things to Consider When Selling a Business in Sunnyvale, CA
Buyers pay more for certainty than for uncertainty, especially when it comes to future cash flows. So, think about ways to lock in future cash flows for a prospective buyer and, if it can be done, you'll then be able to command a higher sale price for your business. This useful tip for selling a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Sunnyvale, CA 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 Sunnyvale, CA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the San Jose-Sunnyvale-Santa Clara, CA metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Sunnyvale area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Sunnyvale area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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