Buying a Business
Cost to Buy a Business in Milwaukee
Planning on buying a Milwaukee, Wisconsin business? Your first question will probably be "How much does it cost to buy a business in Milwaukee?"
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Milwaukee.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. 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 want to buy a company in Wisconsin, take a look at the BizBuySell Wisconsin listings to get instant access to business-for-sale listings for Milwaukee and other Wisconsin towns.
Milwaukee, WI Business Valuations
According to BizBuySell.com, the median asking price for an Milwaukee business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $367,450.
That was based on 84 listings in the Milwaukee-Waukesha-West Allis, WI metro area. Many of the businesses in the dataset are outside of Milwaukee, but they are in the area and so are probably representative of Milwaukee 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 Milwaukee business for much less. At the same time, some Milwaukee businesses may cost much more.
Importantly, this is the asking price for an Milwaukee business. Typically, when a business owner lists a company 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. That means a business listed for $200,000 might be sold for between $170,000 and $180,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Milwaukee-Waukesha-West Allis, WI metro area for the last 8 quarters.
Revenue Multiples In Milwaukee, WI
In the Milwaukee-Waukesha-West Allis, WI metro area, companies will typically sell for 1.02 times the selling company's revenues. The data indicates that is the mean revenue multiple for Q4 2008 in this area of the country.
In other words, a firm with revenues of $200,000 might list for $203,239. Remember, however, that this is strictly an average for revenue multiples in Milwaukee and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Milwaukee area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $505,433 in Q4 2008.
Cash Flow Multiples In Milwaukee, WI
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 Milwaukee-Waukesha-West Allis, WI metro area was 4.42.
So, a company with cash flows of $120,000 might have an asking price of $530,939. 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 Milwaukee area, based on BizBuySell.com's quarterly reports.
In case you were wondering what typical cash flows are for a business in Milwaukee, BizBuySell.com reports that the median cash flow for Milwaukee area businesses was $97,640 in Q4 2008.
Tips for Milwaukee, WI Business Buyers
If you are interested in buying an existing business, you want the business broker you are working with to be selling you to the seller. As such, it's important that you demonstrate that you're a qualified, motivated buyer. Being prepared and serious about your search is an important initial step. This advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Milwaukee, WI Businesses
If you have a specific business in mind and want to look at comparables in the area, 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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