Buying a Business
Cost to Buy a Business in Miami Beach
Planning on buying a Miami Beach, Florida business? You'd do well to learn a little bit about trends in Miami Beach, Florida business valuations.
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Miami Beach.
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 Florida, check out the BizBuySell Florida listings to see the latest business-for-sale listings for Miami Beach and other Florida cities.
Miami Beach, FL Business Valuations
According to BizBuySell.com, the median asking price for an Miami Beach business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $275,000.
That was based on 2004 listings in the Miami-Fort Lauderdale-Miami Beach, FL metro area. Many of the businesses in the dataset are outside of Miami Beach, but they are in the area and so are probably representative of Miami Beach 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 Miami Beach business for much less. At the same time, some Miami Beach businesses may cost much more.
Importantly, this is the asking price for an Miami Beach 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. As an example, a company listed for $275,000 might sell for between $233,750 and $247,500.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Miami-Fort Lauderdale-Miami Beach, FL metro area for the last 8 quarters.
Revenue Multiples In Miami Beach, FL
In the Miami-Fort Lauderdale-Miami Beach, FL metro area, companies will typically sell for 0.87 times the selling company's revenues. The data indicates that is 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 $173,966. 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 Miami Beach area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $450,000 in Q4 2008.
Cash Flow Multiples In Miami Beach, 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 Miami-Fort Lauderdale-Miami Beach, FL metro area was 3.16.
So, a company with cash flows of $120,000 might have an asking price of $379,254. 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 Miami Beach area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Miami Beach, BizBuySell.com reports that the median cash flow for Miami Beach area businesses was $112,000 in Q4 2008.
Things to Consider When Buying a Business in Miami Beach, FL
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 Miami Beach, FL 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 additional information.
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