Buying a Business
Cost to Buy a Business in Fremont
Considering purchasing a company in Fremont, California? You've come to the right place to get statistics and trend data on Fremont, California business-for-sale transactions.
Luckily, the team at BizBuySell.com has made some data available on what businesses are going for in Fremont.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. When a business broker in a local city has a listing, the broker will typically post it on BizBuySell.com. They also have many FSBO (for sale by owner) business-for-sale listings.
If you want to buy a company in California, peruse the BizBuySell California listings to see the latest business-for-sale listings for Fremont and other California municipalities.
Business Valuations in Fremont, CA
Based on the BizBuySell.com data, the median asking price for an Fremont business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $250,000.
That was based on 333 listings in the San Francisco-Oakland-Fremont, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Fremont, but they are in the area and so are probably representative of Fremont 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 Fremont business for much less. The flip side is that some Fremont businesses may cost much more.
Another thing you should know is that this is the asking price for an Fremont business. Typically, when a business 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 ratios depend on deal specifics but typically might be between 0.85 and 0.90. Based on this rule of thumb, a business listed for $225,000 might sell for between $191,250 and $202,500.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the San Francisco-Oakland-Fremont, CA metro area for the last 8 quarters.
Revenue Multiples In Fremont, CA
In the San Francisco-Oakland-Fremont, CA metro area, companies will usually sell for 0.69 times the selling company's revenues. This 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 $138,562. Keep in mind that this is just 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 Fremont area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $444,500 in Q4 2008.
Cash Flow Multiples In Fremont, CA
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 San Francisco-Oakland-Fremont, CA metro area was 3.13.
So, a firm with cash flows of $120,000 might have an asking price of $375,835. That math only works if the business sells for the area's average multiple. Actual cash flow multiples are based on business specifics.
The table below shows how cash flow multiples are trending in the Fremont area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Fremont, BizBuySell.com determined that the median cash flow for Fremont area businesses was $104,000 in Q4 2008.
Tips for Fremont, CA Business Buyers
The baby boomer generation has made its mark in the business world. Aging boomers are now looking toward retirement, while many younger boomers find they're ready to be their own boss. It's a good idea to look at businesses that are being sold by aging business boomers as they may be motivated sellers. This helpful tip on buying a business comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Fremont, CA 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 additional information.
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