Q1 2009 Costs to Buy a Business
How Much Is My Towson Business Worth?
We just received the latest Towson, Maryland business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Towson, MD
According to statistics issued by BizBuySell.com, Towson business-for-sale listings in Q1 2009 had a median asking price of $250,000.
That compares to a median ask price of $275,000 in Q1 2008. Given that Towson, MD median business asking prices appear to be dropping, it suggests that larger Towson businesses in may be holding off on selling until the economy turns around.
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 Towson company for much less. However, some Towson businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Towson business. When a 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. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Towson Businesses for Sale in the Dataset
The study data comprised 285 listings in the Baltimore-Towson, MD metro area. As such, some of the businesses used to derive the median valuation might be outside of Towson, but they are close by and so are likely representative of Towson business valuations.
In Q1 2008, just one year ago, there were 311 Towson listings in the BizBuySell.com dataset. As a result of the recession, fewer Towson business owners are selling because they hope to weather the storm and sell after the economy turns around.
Towson, MD Q1 2009 Revenue Multiples
In the Baltimore-Towson, MD metro area, businesses will typically sell for 0.72 times the selling company's revenues. This 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 $143,727. Remember, however, that this is just 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 $420,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.84 and the median revenue for listed businesses was $439,000.
Q1 2009 Cash Flow Multiples In Towson, MD
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Baltimore-Towson, MD metro area was 3.11.
So, a firm with cash flows of $150,000 might have an asking price of $465,803. 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 Towson, BizBuySell.com found that the median cash flow for Towson area businesses was $100,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.36 and the median cash flow was $100,000.
Tips for Towson, MD Business Sellers
The best time to sell a business is when you don't have to sell the business. If you have to sell under time pressure, you are not likely to get the best sale price. So, don't wait to sell a business until something (e.g. bad health, a divorce, etc.) forces you to sell. This advice on selling a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Towson, MD 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 Towson, MD Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Baltimore-Towson, MD metro area for the last 9 quarters.
Here is how median revenue multiples are changing in the Towson area, based on BizBuySell.com's economic data.
The table below shows how cash flow multiples are trending in the Towson area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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