Buying a Business
Cost to Buy a Business in Baytown
Considering purchasing a company in Baytown, Texas? You're no doubt wondering how much a typical Baytown, Texas business costs to buy.
Fortunately, the team at BizBuySell.com has made some data available on what it costs to buy a business in Baytown.
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 Texas, check out the BizBuySell Texas listings to see the latest business-for-sale listings for Baytown and other Texas cities.
Business Valuations in Baytown, TX
According to BizBuySell.com, the median asking price for an Baytown business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $285,000.
That was based on 515 listings in the Houston-Sugar Land-Baytown, TX metro area. As such, some of the businesses used to derive the median valuation might be outside of Baytown, but they are in the area and so are probably representative of Baytown 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 Baytown business for much less. At the same time, some Baytown businesses may cost much more.
Another thing you should know is that this is the asking price for an Baytown business. Typically, when a business owner lists a business for sale, they start with an asking price that is higher than the eventual sale price. The sale-price-to-asking-price ratios depend on deal specifics but typically might be between 0.85 and 0.90. Based on this rule of thumb, a business listed for $225,000 might sell for between $191,250 and $202,500.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses for sale in the Houston-Sugar Land-Baytown, TX metro area for the last 8 quarters.
Revenue Multiples In Baytown, TX
In the Houston-Sugar Land-Baytown, TX metro area, businesses will typically sell for 1.07 times the selling company's revenues. The data indicates that is the mean revenue multiple for Q4 2008 in this area of the country.
In other words, a business that has revenues of $200,000 might list for $214,039. Remember, however, that this is strictly an average for revenue multiples in Baytown and surrounding communities. Some businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are tracking in the Baytown area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $400,444 in Q4 2008.
Cash Flow Multiples In Baytown, TX
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 Houston-Sugar Land-Baytown, TX metro area was 3.70.
So, a business with cash flows of $120,000 might have an asking price of $443,479. 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 Baytown area, based on BizBuySell.com's quarterly reports.
Flow Multiple
In case you were wondering what typical cash flows are for a business in Baytown, BizBuySell.com reports that the median cash flow for Baytown area businesses was $102,365 in Q4 2008.
Things to Consider When Buying a Business in Baytown, TX
Before you start the process of buying a business, line up a team of professional advisors. Alert your attorney, accountant and financial advisors that you are looking for a business to buy. This good advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Baytown, TX 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 published on a quarterly basis. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for additional information.
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