Buying a Business
Cost to Buy a Business in Clearwater
Considering purchasing a company in Clearwater, Florida? You're no doubt wondering how much a typical Clearwater, Florida 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 Clearwater.
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 Florida, check out the BizBuySell Florida listings to get instant access to business-for-sale listings for Clearwater and other Florida municipalities.
Business Valuations in Clearwater, FL
According to BizBuySell.com, the median asking price for an Clearwater business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $205,000.
That was based on 963 listings in the Tampa-St. Petersburg-Clearwater, FL metro area. As such, some of the businesses used to derive the median valuation might be outside of Clearwater, but they are in the area and so are likely representative of Clearwater 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 Clearwater business for much less. At the same time, some Clearwater businesses may cost much more.
Importantly, this is the asking price for an Clearwater business. Typically, when a small business owner 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 Tampa-St. Petersburg-Clearwater, FL metro area for the last 8 quarters.
Revenue Multiples In Clearwater, FL
In the Tampa-St. Petersburg-Clearwater, FL metro area, businesses will typically sell for 0.89 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 $177,399. Keep in mind that this is strictly an average for revenue multiples in Clearwater and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are changing in the Clearwater area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $352,000 in Q4 2008.
Cash Flow Multiples In Clearwater, FL
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 Tampa-St. Petersburg-Clearwater, FL metro area was 3.33.
So, a company with cash flows of $120,000 might have an asking price of $399,722. That's if the business fits the area average. Actual cash flow multiples can vary considerably from one business to another.
The table below shows how cash flow multiples are trending in the Clearwater area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Clearwater, BizBuySell.com found that the median cash flow for Clearwater area businesses was $86,878 in Q4 2008.
Tips for Clearwater, FL Business Buyers
It is important to keep in mind that no business is perfect. It is not unusual for buyers to find a few inconsistencies or anomalies in a business when they get to the due diligence stage. These should be questioned and understood. If the information turns out to be structural or material, then you may consider either canceling a deal or renegotiating a deal based on the new facts. However, be careful not to over-react and assume that any deviation is a deal-killer. Oftentimes, these differences can be explained and overcome with thoughtful communication between all the parties. This good business buying tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Clearwater, FL 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 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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