Buying a Business
Cost to Buy a Business in Miami
Considering purchasing a company in Miami, Florida? You're no doubt wondering how much a typical Miami, Florida business costs to buy.
Fortunately, a company called BizBuySell.com has made some data available on what businesses are going for in Miami.
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 Florida, check out the BizBuySell Florida listings to see the latest business-for-sale listings for Miami and other Florida municipalities.
Business Valuations in Miami, FL
According to BizBuySell.com, the median asking price for an Miami 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. As such, some of the businesses used to derive the median valuation might be outside of Miami, but they are in the area and so are probably representative of Miami 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 Miami business for much less. At the same time, some Miami businesses may cost much more.
Another thing you should know is that this is the asking price for an Miami business. Typically, when a 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 Miami-Fort Lauderdale-Miami Beach, FL metro area for the last 8 quarters.
Miami, FL Revenue Multiples
In the Miami-Fort Lauderdale-Miami Beach, FL metro area, businesses will typically sell for 0.87 times the selling company's revenues. This was the mean revenue multiple for Q4 2008 in this metro area.
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 businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are tracking in the Miami 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, FL
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 Miami-Fort Lauderdale-Miami Beach, FL metro area was 3.16.
So, a firm with cash flows of $120,000 might have an asking price of $379,254. That math only works if the business sells for the area's average multiple. Cash flow multiples can vary considerably based on many factors.
The table below shows how cash flow multiples are trending in the Miami area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Miami, BizBuySell.com reports that the median cash flow for Miami area businesses was $112,000 in Q4 2008.
Tips for Miami, FL Business Buyers
Sellers want to be sure their business will continue to be successful. They want to find a buyer who has experience and will take care of the company's employees. As such, you are selling yourself to the current business owner and the professional team that represents the seller. You may think you are buying, but you also need to be selling. This useful tip for buying a business was provided by Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Miami, FL 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 published on a quarterly basis. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for additional information.
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