Buying a Business
Cost to Buy a Business in Mentor
Considering purchasing a company in Mentor, Ohio? You'd do well to learn a little bit about trends in Mentor, Ohio business valuations.
Fortunately, the team at BizBuySell.com has made some data available on what it costs to buy a business in Mentor.
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. They also have many FSBO (for sale by owner) business-for-sale listings.
If you are looking to buy a business in Ohio, take a look at the BizBuySell Ohio listings to to be on the inside track with the newest business-for-sale listings for Mentor and other Ohio towns.
Business Valuations in Mentor, OH
According to BizBuySell.com, the median asking price for an Mentor business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $180,000.
That was based on 100 listings in the Cleveland-Elyria-Mentor, OH metro area. Many of the businesses in the dataset are outside of Mentor, but they are in the area and so are likely representative of Mentor 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 Mentor business for much less. Having said that, some Mentor businesses may cost much more.
Importantly, this is the asking price for an Mentor business. Typically, when a small 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 ratios depend on deal specifics 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 Cleveland-Elyria-Mentor, OH metro area for the last 8 quarters.
Mentor, OH Revenue Multiples
In the Cleveland-Elyria-Mentor, OH metro area, businesses will typically sell for 0.72 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 $144,691. 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 Mentor area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $308,678 in Q4 2008.
Cash Flow Multiples In Mentor, OH
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the Cleveland-Elyria-Mentor, OH metro area was 3.45.
So, a business with cash flows of $120,000 might have an asking price of $413,490. 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 Mentor area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Mentor, BizBuySell.com reports that the median cash flow for Mentor area businesses was $65,332 in Q4 2008.
Things to Consider When Buying a Business in Mentor, OH
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 Mentor, OH Businesses
If you have a specific business in mind and want to get a ballpark business valuation, 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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