Buying a Business
Cost to Buy a Business in Carmel
Considering purchasing a company in Carmel, Indiana? You're no doubt wondering how much a typical Carmel, Indiana 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 Carmel.
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. 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 Indiana, take a look at the BizBuySell Indiana listings to to be on the inside track with the newest business-for-sale listings for Carmel and other Indiana towns.
Carmel, IN Business Valuations
Based on the BizBuySell.com data, the median asking price for an Carmel business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $242,500.
That was based on 112 listings in the Indianapolis-Carmel, IN metro area. As such, some of the businesses used to derive the median valuation might be outside of Carmel, but they are in the area and so are probably representative of Carmel 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 Carmel business for much less. Having said that, some Carmel businesses may cost much more.
Another thing you should know is that this is the asking price for an Carmel business. Typically, when an owner lists a business for sale, they start with an asking price that is higher than the ultimate sale price. The sale-price-to-asking-price ratios depend on deal specifics 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 Indianapolis-Carmel, IN metro area for the last 8 quarters.
Revenue Multiples In Carmel, IN
In the Indianapolis-Carmel, IN metro area, businesses will typically sell for 0.76 times the selling company's revenues. This was the mean revenue multiple for Q4 2008 in this part of the country.
In other words, a business that has revenues of $200,000 might list for $152,407. Remember, however, that this is just an average for revenue multiples in Carmel 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 Carmel area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $377,000 in Q4 2008.
Cash Flow Multiples In Carmel, IN
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 Indianapolis-Carmel, IN metro area was 3.02.
So, a firm with cash flows of $120,000 might have an asking price of $362,503. That's if the business fits the area average. Most businesses will not conform to industry- or area averages.
Here is how cash flow multiples are trending in the Carmel area, based on BizBuySell.com's quarterly reports.
In case you were wondering what typical cash flows are for a business in Carmel, BizBuySell.com found that the median cash flow for Carmel area businesses was $90,528 in Q4 2008.
Tips for Carmel, IN Business Buyers
When buying a business, always start with a self assessment. Ask yourself why you want to buy a business. What types of work activities do you like and what kind of lifestyle do you want to pursue? Be sure to include your family in the assessment. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Carmel, IN 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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