Buying a Business
Cost to Buy a Business in Albuquerque
Considering purchasing a company in Albuquerque, New Mexico? You'd do well to learn a little bit about trends in Albuquerque, New Mexico business valuations.
Fortunately, the folks at BizBuySell.com have made some data available on what businesses are going for in Albuquerque.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. The vast majority of business brokers in the country put their business listings on BizBuySell.com. They also have many FSBO (for sale by owner) business-for-sale listings.
If you want to buy a company in New Mexico, peruse the BizBuySell New Mexico listings to see the latest business-for-sale listings for Albuquerque and other New Mexico municipalities.
Business Valuations in Albuquerque, NM
Based on the BizBuySell.com data, the median asking price for an Albuquerque business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $323,850.
That was based on 64 listings in the Albuquerque, NM metro area. As such, some of the businesses used to derive the median valuation might be outside of Albuquerque, but they are in the area and so are probably representative of Albuquerque business valuations.
Remember that this is the median asking price for a business. If you are in the market to buy a company, you may be able to buy an Albuquerque business for much less. At the same time, some Albuquerque businesses may cost much more.
Importantly, this is the asking price for an Albuquerque business. Typically, when a business owner lists a company for sale, they start with an asking price that is higher than the eventual sale price. The sale-price-to-asking-price ratio varies considerably but typically might be between 0.85 and 0.90. In other words, a business listed for $100,000 might sell for between $85,000 and $90,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Albuquerque, NM metro area for the last 8 quarters.
Revenue Multiples In Albuquerque, NM
In the Albuquerque, NM metro area, small businesses will typically sell for 0.71 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this part of the country.
In other words, a business that has revenues of $200,000 might list for $141,070. Remember, however, that this is just an average for revenue multiples in the area. Some entities will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are tracking in the Albuquerque area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $579,300 in Q4 2008.
Cash Flow Multiples In Albuquerque, NM
Another useful technique to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Albuquerque, NM metro area was 3.74.
So, a business with cash flows of $120,000 might have an asking price of $449,244. That's if the business fits the area average. Most businesses will not conform to industry- or area averages.
The table below shows how cash flow multiples are trending in the Albuquerque area, based on BizBuySell.com's quarterly reports.
In case you were wondering what typical cash flows are for a business in Albuquerque, BizBuySell.com reports that the median cash flow for Albuquerque area businesses was $96,650 in Q4 2008.
Tips for Albuquerque, NM Business Buyers
Before you start shopping for a business to buy, establish your acquisition criteria. It's important to define the parameters of your search. Include geographic requirements, criteria on the transaction size, and other business attributes that are important to you. Having set criteria will help you demonstrate that you are a thoughtful and committed buyer. It will also streamline your business buying process. This helpful advice on how to buy a business comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Albuquerque, NM Businesses
If you have a specific business in mind and want to get a ballpark business valuation, we recommend the BizBuySell.com Business Valuation Tool. You can refine the dataset that generates business valuations to meet your specific needs, and 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 indicator that tracks the health of the U.S. small business economy. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for more information.
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