Buying a Business
Cost to Buy a Business in Long Island
If you want to buy a business in Long Island, New York, you've come to the right place to get statistics and trend data on Long Island, New York business-for-sale transactions.
Fortunately, the team at BizBuySell.com has made some data available on what it costs to buy a business in Long Island.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. 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 are looking to buy a business in New York, check out the BizBuySell New York listings to to be on the inside track with the newest business-for-sale listings for Long Island and other New York municipalities.
Business Valuations in Long Island, NY
According to BizBuySell.com, the median asking price for an Long Island business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $250,000.
That was based on 5144 listings in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area. Many of the businesses in the dataset are outside of Long Island, but they are nearby and so are likely representative of Long Island business valuations.
Remember 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 Long Island business for much less. The flip side is that some Long Island businesses may cost much more.
Another thing you should know is that this is the asking price for an Long Island 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 New York-Northern New Jersey-Long Island, NY-NJ-PA metro area for the last 8 quarters.
Long Island, NY Revenue Multiples
In the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area, companies will usually sell for 0.83 times the selling company's revenues. This 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 $165,072. 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 trending in the Long Island area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $445,000 in Q4 2008.
Cash Flow Multiples In Long Island, NY
Another useful technique to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the New York-Northern New Jersey-Long Island, NY-NJ-PA metro area was 2.91.
So, a firm with cash flows of $120,000 might have an asking price of $348,662. 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 Long Island area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Long Island, BizBuySell.com reports that the median cash flow for Long Island area businesses was $120,000 in Q4 2008.
Things to Consider When Buying a Business in Long Island, NY
Before you start shopping for a business to buy, establish your acquisition criteria. It's important to define the parameters of your search. Include geographic requirements, criteria on the transaction size, and other business attributes that are important to you. Having set criteria will help you demonstrate that you are a thoughtful and committed buyer. It will also streamline your business buying process. This helpful advice on how to buy a business comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Long Island, NY Businesses
If you have a specific business in mind and want to find out how much a business is worth, 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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