Buying a Business
Cost to Buy a Business in Greensboro
Considering purchasing a company in Greensboro, North Carolina? You're no doubt wondering how much a typical Greensboro, North Carolina business costs to buy.
The good news is a company called BizBuySell.com has made some data available on what it costs to buy a business in Greensboro.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. Their listings include almost all of the available listings from business brokers nationwide. 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 North Carolina, check out the BizBuySell North Carolina listings to get instant access to business-for-sale listings for Greensboro and other North Carolina cities.
Business Valuations in Greensboro, NC
According to BizBuySell.com, the median asking price for an Greensboro business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $195,000.
That was based on 65 listings in the Greensboro-High Point, NC metro area. As such, some of the businesses used to derive the median valuation might be outside of Greensboro, but they are in the area and so are probably representative of Greensboro 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 Greensboro business for much less. The flip side is that some Greensboro businesses may cost much more.
Another thing you should know is that this is the asking price for an Greensboro business. Typically, when a business owner lists a business for sale, they start with an asking price that is higher than the final 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 businesses for sale in the Greensboro-High Point, NC metro area for the last 8 quarters.
Greensboro, NC Revenue Multiples
In the Greensboro-High Point, NC metro area, small businesses will usually sell for 0.82 times the selling company's revenues. That 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 $164,191. Remember, however, 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 moving in the Greensboro area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $310,514 in Q4 2008.
Cash Flow Multiples In Greensboro, NC
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 Greensboro-High Point, NC metro area was 3.01.
So, a business with cash flows of $120,000 might have an asking price of $361,454. 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 Greensboro area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Greensboro, BizBuySell.com reports that the median cash flow for Greensboro area businesses was $80,000 in Q4 2008.
Things to Consider When Buying a Business in Greensboro, NC
When buying a business, it's often a good idea to have the previous owner stay on for a transition period after you buy the business. This can range from a couple of weeks to several months. The goal is to make sure you are well-trained on how to run the business and that you minimize any revenue or customer attrition. Most sellers are willing to do this. After all, they want to see their company continue to do well even after they are no longer involved in the business. This advice on how to structure a business purchase comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Greensboro, 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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