Buying a Business
Cost to Buy a Business in Atlanta
Considering purchasing a company in Atlanta, Georgia? You've come to the right place to get statistics and trend data on Atlanta, Georgia business-for-sale transactions.
The good news is the folks at BizBuySell.com have made some data available on what businesses are going for in Atlanta.
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 are looking to buy a business in Georgia, take a look at the BizBuySell Georgia listings to to be on the inside track with the newest business-for-sale listings for Atlanta and other Georgia towns.
Atlanta, GA Business Valuations
Based on the BizBuySell.com data, the median asking price for an Atlanta business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $239,500.
That was based on 954 listings in the Atlanta-Sandy Springs-Marietta, GA metro area. Many of the businesses in the dataset are outside of Atlanta, but they are nearby and so are likely representative of Atlanta 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 Atlanta business for much less. At the same time, some Atlanta businesses may cost much more.
Another thing you should know is that this is the asking price for an Atlanta business. Typically, when an owner lists a company for sale, they start with an asking price that is higher than the contracted sale price. The sale-price-to-asking-price ratio varies considerably but typically might be between 0.85 and 0.90. This suggests that a business listed for $325,000 might be purchased for between $276,250 and $292,500.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Atlanta-Sandy Springs-Marietta, GA metro area for the last 8 quarters.
Atlanta, GA Revenue Multiples
In the Atlanta-Sandy Springs-Marietta, GA metro area, small businesses will usually sell for 1.01 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this area of the country.
In other words, a firm with revenues of $200,000 might list for $201,339. Remember, however, that this is in fact an average for revenue multiples in Atlanta and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Atlanta area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $360,000 in Q4 2008.
Cash Flow Multiples In Atlanta, GA
Another popular way to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Atlanta-Sandy Springs-Marietta, GA metro area was 3.51.
So, a firm with cash flows of $120,000 might have an asking price of $421,536. That's if the business fits the area average. Actual cash flow multiples are based on business specifics.
The table below shows how cash flow multiples are trending in the Atlanta area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Atlanta, BizBuySell.com determined that the median cash flow for Atlanta area businesses was $99,450 in Q4 2008.
Things to Consider When Buying a Business in Atlanta, GA
If you are interested in buying an existing business, you want the business broker you are working with to be selling you to the seller. As such, it's important that you demonstrate that you're a qualified, motivated buyer. Being prepared and serious about your search is an important initial step. This advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Atlanta, GA Businesses
If you have a specific business in mind and want to look at comparables in the area, 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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