Buying a Business
Cost to Buy a Business in Fort Lauderdale
Considering purchasing a company in Fort Lauderdale, Florida? Your first question will probably be "How much does it cost to buy a business in Fort Lauderdale?"
Fortunately, the folks at BizBuySell.com have made some data available on what businesses are going for in Fort Lauderdale.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. When a business broker in a local city has a listing, the broker will typically post it 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 want to buy a company in Florida, take a look at the BizBuySell Florida listings to get instant access to business-for-sale listings for Fort Lauderdale and other Florida towns.
Business Valuations in Fort Lauderdale, FL
According to BizBuySell.com, the median asking price for an Fort Lauderdale business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $275,000.
That was based on 2004 listings in the Miami-Fort Lauderdale-Miami Beach, FL metro area. As such, some of the businesses used to derive the median valuation might be outside of Fort Lauderdale, but they are in the area and so are probably representative of Fort Lauderdale 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 Fort Lauderdale business for much less. At the same time, some Fort Lauderdale businesses may cost much more.
Another thing you should know is that this is the asking price for an Fort Lauderdale business. Typically, when an 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. Given this industry norm, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Miami-Fort Lauderdale-Miami Beach, FL metro area for the last 8 quarters.
Revenue Multiples In Fort Lauderdale, FL
In the Miami-Fort Lauderdale-Miami Beach, FL metro area, companies will usually sell for 0.87 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 firm with revenues of $200,000 might list for $173,966. Keep in mind that this is in fact an average for revenue multiples in the area. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Fort Lauderdale area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $450,000 in Q4 2008.
Cash Flow Multiples In Fort Lauderdale, FL
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Miami-Fort Lauderdale-Miami Beach, FL metro area was 3.16.
So, a business with cash flows of $120,000 might have an asking price of $379,254. That math only works if the business sells for the area's average multiple. Most businesses will not conform to industry- or area averages.
Here is how cash flow multiples are trending in the Fort Lauderdale area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Fort Lauderdale, BizBuySell.com reports that the median cash flow for Fort Lauderdale area businesses was $112,000 in Q4 2008.
Things to Consider When Buying a Business in Fort Lauderdale, FL
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 Fort Lauderdale, 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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