Buying a Business
Cost to Buy a Business in Bellevue
Considering purchasing a company in Bellevue, Washington? You'd do well to learn a little bit about trends in Bellevue, Washington business valuations.
Fortunately, the folks at BizBuySell.com have made some data available on what businesses are going for in Bellevue.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. The vast majority of business brokers in the country put their business listings on BizBuySell.com. In addition, many business owners who are selling on their own, without a broker, will place listings on BizBuySell.com.
If you are looking to buy a business in Washington, check out the BizBuySell Washington listings to see the latest business-for-sale listings for Bellevue and other Washington towns.
Bellevue, WA Business Valuations
Based on the BizBuySell.com data, the median asking price for an Bellevue business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $250,000.
That was based on 321 listings in the Seattle-Tacoma-Bellevue, WA metro area. As such, some of the businesses used to derive the median valuation might be outside of Bellevue, but they are in the area and so are probably representative of Bellevue business valuations.
Note 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 Bellevue business for much less. At the same time, some Bellevue businesses may cost much more.
Importantly, this is the asking price for an Bellevue business. Typically, when an entrepreneur 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 companies in the Seattle-Tacoma-Bellevue, WA metro area for the last 8 quarters.
Revenue Multiples In Bellevue, WA
In the Seattle-Tacoma-Bellevue, WA metro area, businesses will typically sell for 0.67 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this metro area.
In other words, a firm with revenues of $200,000 might list for $134,288. Remember, however, that this is only an average for revenue multiples in Bellevue and surrounding communities. Some companies will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Bellevue area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $456,249 in Q4 2008.
Cash Flow Multiples In Bellevue, WA
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 Seattle-Tacoma-Bellevue, WA metro area was 3.19.
So, a firm with cash flows of $120,000 might have an asking price of $382,642. 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 Bellevue area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Bellevue, BizBuySell.com reports that the median cash flow for Bellevue area businesses was $103,224 in Q4 2008.
Things to Consider When Buying a Business in Bellevue, WA
Once you have a business that you would like to buy, it may be time to bring in your attorney. However, refrain from spending lots of money on legal documentation until you are certain you are going to buy the business. Many buyers spend money on legal fees before they are committed to buying a coompany...that's a mistake you'll want to avoid. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Bellevue, WA 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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