Buying a Business
Cost to Buy a Business in Carlsbad
If you want to buy a business in Carlsbad, California, you're no doubt wondering how much a typical Carlsbad, California business costs to buy.
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Carlsbad.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. 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 are looking to buy a business in California, check out the BizBuySell California listings to to be on the inside track with the newest business-for-sale listings for Carlsbad and other California towns.
Business Valuations in Carlsbad, CA
Based on the BizBuySell.com data, the median asking price for an Carlsbad business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $199,750.
That was based on 388 listings in the San Diego-Carlsbad-San Marcos, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Carlsbad, but they are nearby and so are likely representative of Carlsbad 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 Carlsbad business for much less. At the same time, some Carlsbad businesses may cost much more.
Importantly, this is the asking price for an Carlsbad business. Typically, when an owner lists a business 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. 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 San Diego-Carlsbad-San Marcos, CA metro area for the last 8 quarters.
Revenue Multiples In Carlsbad, CA
In the San Diego-Carlsbad-San Marcos, CA metro area, companies will typically sell for 0.69 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 business that has revenues of $200,000 might list for $138,134. Remember, however, that this is just an average for revenue multiples in Carlsbad 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 Carlsbad area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $355,000 in Q4 2008.
Cash Flow Multiples In Carlsbad, CA
Another popular way to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the San Diego-Carlsbad-San Marcos, CA metro area was 2.77.
So, a business with cash flows of $120,000 might have an asking price of $332,023. 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 Carlsbad area, based on BizBuySell.com's quarterly reports.
In case you were wondering what typical cash flows are for a business in Carlsbad, BizBuySell.com found that the median cash flow for Carlsbad area businesses was $85,000 in Q4 2008.
Tips for Carlsbad, CA Business Buyers
Bidding too little for a company is a bad strategy. Lowball bids are very rarely accepted. By making too low of a bid for a business, you risk offending the seller and ruining your chances of completing a deal. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Carlsbad, CA Businesses
If you have a specific business in mind and want to find out how much a business is worth, 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 more information.
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