Buying a Business
Cost to Buy a Business in Metairie
If you want to buy a business in Metairie, Louisiana, you're no doubt wondering how much a typical Metairie, Louisiana business costs to buy.
The good news is the folks at BizBuySell.com have made some data available on what it costs to buy a business in Metairie.
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 Louisiana, peruse the BizBuySell Louisiana listings to see the latest business-for-sale listings for Metairie and other Louisiana towns.
Business Valuations in Metairie, LA
According to BizBuySell.com, the median asking price for an Metairie business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $250,000.
That was based on 64 listings in the New Orleans-Metairie-Kenner, LA metro area. Many of the businesses in the dataset are outside of Metairie, but they are in the area and so are probably representative of Metairie 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 Metairie business for much less. At the same time, some Metairie businesses may cost much more.
Another thing you should know is that this is the asking price for an Metairie business. Typically, when an 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 companies in the New Orleans-Metairie-Kenner, LA metro area for the last 8 quarters.
Revenue Multiples In Metairie, LA
In the New Orleans-Metairie-Kenner, LA metro area, companies will usually sell for 1.07 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 $213,766. Keep in mind that this is simply 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 trending in the Metairie area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $345,510 in Q4 2008.
Cash Flow Multiples In Metairie, LA
Another popular way to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the New Orleans-Metairie-Kenner, LA metro area was 3.71.
So, a business with cash flows of $120,000 might have an asking price of $445,078. That's if the business fits the area average. Most businesses will not conform to industry- or area averages.
Here is how cash flow multiples are trending in the Metairie area, based on BizBuySell.com's quarterly reports.
Flow Multiple
In case you were wondering what typical cash flows are for a business in Metairie, BizBuySell.com found that the median cash flow for Metairie area businesses was $94,644 in Q4 2008.
Tips for Metairie, LA Business Buyers
Bidding too little for a company is a bad strategy. Lowball bids are very rarely accepted. By making too low of a bid for a business, you risk offending the seller and ruining your chances of completing a deal. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Metairie, LA 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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