Buying a Business
Cost to Buy a Business in Camden
If you want to buy a business in Camden, New Jersey, you're no doubt wondering how much a typical Camden, New Jersey business costs to buy.
The good news is the folks at BizBuySell.com have made some data available on what it costs to buy a business in Camden.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. Their listings include almost all of the available listings from business brokers nationwide. In addition, many business owners who are selling on their own, without a broker, will place listings on BizBuySell.com.
If you want to buy a company in New Jersey, check out the BizBuySell New Jersey listings to to be on the inside track with the newest business-for-sale listings for Camden and other New Jersey towns.
Camden, NJ Business Valuations
Based on the BizBuySell.com data, the median asking price for an Camden business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $275,000.
That was based on 955 listings in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area. As such, some of the businesses used to derive the median valuation might be outside of Camden, but they are close by and so are likely representative of Camden 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 Camden business for much less. The flip side is that some Camden businesses may cost much more.
Another thing you should know is that this is the asking price for an Camden business. Typically, when a small 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 ratio varies considerably but typically might be between 0.85 and 0.90. As such, a business listed for $175,000 might sell for between $148,750 and $157,500.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area for the last 8 quarters.
Revenue Multiples In Camden, NJ
In the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area, businesses will typically sell for 0.90 times the selling company's revenues. This was 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 $179,130. Keep in mind that this is just an average for revenue multiples in the area. Some companies will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Camden area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $425,000 in Q4 2008.
Cash Flow Multiples In Camden, NJ
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 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area was 3.31.
So, a business with cash flows of $120,000 might have an asking price of $396,623. 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 Camden area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Camden, BizBuySell.com reports that the median cash flow for Camden area businesses was $109,000 in Q4 2008.
Tips for Camden, NJ Business Buyers
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 Camden, NJ 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 additional information.
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