Buying a Business
Cost to Buy a Business in Charlotte
Considering purchasing a company in Charlotte, North Carolina? You're no doubt wondering how much a typical Charlotte, North Carolina business costs to buy.
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Charlotte.
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 North Carolina, check out the BizBuySell North Carolina listings to see the latest business-for-sale listings for Charlotte and other North Carolina towns.
Business Valuations in Charlotte, NC
According to BizBuySell.com, the median asking price for an Charlotte business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $300,000.
That was based on 227 listings in the Charlotte-Gastonia-Concord, NC-SC metro area. As such, some of the businesses used to derive the median valuation might be outside of Charlotte, but they are in the area and so are probably representative of Charlotte 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 Charlotte business for much less. Having said that, some Charlotte businesses may cost much more.
Another thing you should know is that this is the asking price for an Charlotte business. Typically, when an entrepreneur lists a company 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 businesses for sale in the Charlotte-Gastonia-Concord, NC-SC metro area for the last 8 quarters.
Revenue Multiples In Charlotte, NC
In the Charlotte-Gastonia-Concord, NC-SC metro area, businesses will usually sell for 0.80 times the selling company's revenues. This was the mean revenue multiple for Q4 2008 in this metro area.
In other words, a business that has revenues of $200,000 might list for $159,326. Remember, however, that this is only an average for revenue multiples in Charlotte and surrounding communities. Some entities will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are tracking in the Charlotte area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $543,554 in Q4 2008.
Cash Flow Multiples In Charlotte, NC
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the Charlotte-Gastonia-Concord, NC-SC metro area was 3.32.
So, a business with cash flows of $120,000 might have an asking price of $398,966. 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 Charlotte area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Charlotte, BizBuySell.com reports that the median cash flow for Charlotte area businesses was $105,924 in Q4 2008.
Tips for Charlotte, NC Business Buyers
Many buyers want to look at all available options, thinking they'll recognize what they're looking for when they see it. That approach is actually a waste of valuable time and energy and can lead to frustration. A better strategy is to define what you are looking for and then only look at businesses that meet your criteria. This useful business buying advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Charlotte, NC 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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