Buying a Business
Cost to Buy a Business in Jacksonville
Considering purchasing a company in Jacksonville, Florida? You're no doubt wondering how much a typical Jacksonville, Florida business costs to buy.
The good news is the team at BizBuySell.com has made some data available on what it costs to buy a business in Jacksonville.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. 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 are looking to buy a business in Florida, check out the BizBuySell Florida listings to see the latest business-for-sale listings for Jacksonville and other Florida towns.
Jacksonville, FL Business Valuations
According to BizBuySell.com, the median asking price for an Jacksonville business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $195,000.
That was based on 402 listings in the Jacksonville, FL metro area. As such, some of the businesses used to derive the median valuation might be outside of Jacksonville, but they are in the area and so are probably representative of Jacksonville 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 Jacksonville business for much less. At the same time, some Jacksonville businesses may cost much more.
Another thing you should know is that this is the asking price for an Jacksonville 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 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 Jacksonville, FL metro area for the last 8 quarters.
Revenue Multiples In Jacksonville, FL
In the Jacksonville, FL metro area, businesses will typically sell for 0.97 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 $194,609. Remember, however, that this is strictly an average for revenue multiples in the area. Some businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are moving in the Jacksonville area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $318,817 in Q4 2008.
Cash Flow Multiples In Jacksonville, 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 Jacksonville, FL metro area was 3.56.
So, a business with cash flows of $120,000 might have an asking price of $427,729. 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 Jacksonville area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Jacksonville, BizBuySell.com reports that the median cash flow for Jacksonville area businesses was $85,406 in Q4 2008.
Things to Consider When Buying a Business in Jacksonville, FL
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 Jacksonville, FL Businesses
If you have a specific business in mind and want to value the business, 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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