Buying a Business
Cost to Buy a Business in Las Vegas
If you want to buy a business in Las Vegas, Nevada, you're no doubt wondering how much a typical Las Vegas, Nevada 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 Las Vegas.
BizBuySell.com is the biggest business-for-sale listings site on the Internet, offering over 50,000 businesses for sale at any given time. 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 want to buy a company in Nevada, check out the BizBuySell Nevada listings to see the latest business-for-sale listings for Las Vegas and other Nevada cities.
Business Valuations in Las Vegas, NV
Based on the BizBuySell.com data, the median asking price for an Las Vegas business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $216,000.
That was based on 426 listings in the Las Vegas-Paradise, NV metro area. As such, some of the businesses used to derive the median valuation might be outside of Las Vegas, but they are close by and so are likely representative of Las Vegas 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 Las Vegas business for much less. Having said that, some Las Vegas businesses may cost much more.
Another thing you should know is that this is the asking price for an Las Vegas 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 businesses in the Las Vegas-Paradise, NV metro area for the last 8 quarters.
Las Vegas, NV Revenue Multiples
In the Las Vegas-Paradise, NV metro area, small businesses will usually sell for 0.83 times the selling company's revenues. The data indicates that is 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 $165,408. Keep in mind that this is in fact an average for revenue multiples in Las Vegas and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Las Vegas area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $377,330 in Q4 2008.
Cash Flow Multiples In Las Vegas, NV
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 Las Vegas-Paradise, NV metro area was 3.20.
So, a business with cash flows of $120,000 might have an asking price of $384,478. That math only works if the business sells for the area's average multiple. Actual cash flow multiples can vary considerably from one business to another.
The table below shows how cash flow multiples are trending in the Las Vegas area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Las Vegas, BizBuySell.com determined that the median cash flow for Las Vegas area businesses was $101,676 in Q4 2008.
Things to Consider When Buying a Business in Las Vegas, NV
Never underestimate what it will take to be a successful entrepreneur. It's important to understand that owners work long hours, and, in many casees, it can take a while before a business generates sufficient cash flow to pay the owner well. This useful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Las Vegas, NV 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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