Buying a Business
Cost to Buy a Business in New Bedford
Considering purchasing a company in New Bedford, Massachusetts? You'd do well to learn a little bit about trends in New Bedford, Massachusetts business valuations.
Fortunately, the folks at BizBuySell.com have made some data available on what businesses are going for in New Bedford.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. Their listings include almost all of the available listings from business brokers nationwide. 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 Massachusetts, check out the BizBuySell Massachusetts listings to see the latest business-for-sale listings for New Bedford and other Massachusetts towns.
New Bedford, MA Business Valuations
According to BizBuySell.com, the median asking price for an New Bedford business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $165,000.
That was based on 262 listings in the Providence-New Bedford-Fall River, RI-MA metro area. Many of the businesses in the dataset are outside of New Bedford, but they are nearby and so are probably representative of New Bedford 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 New Bedford business for much less. At the same time, some New Bedford businesses may cost much more.
Importantly, this is the asking price for an New Bedford 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 ratios depend on deal specifics but typically might be between 0.85 and 0.90. Given this industry norm, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Providence-New Bedford-Fall River, RI-MA metro area for the last 8 quarters.
New Bedford, MA Revenue Multiples
In the Providence-New Bedford-Fall River, RI-MA metro area, businesses will usually sell for 0.74 times the selling company's revenues. That was 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 $147,135. Remember, however, that this is just an average for revenue multiples in the area. Some small businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the New Bedford area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $343,436 in Q4 2008.
Cash Flow Multiples In New Bedford, MA
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Providence-New Bedford-Fall River, RI-MA metro area was 3.16.
So, a company with cash flows of $120,000 might have an asking price of $378,696. That's if the business fits the area average. The distribution on revenue multiples for a given set of businesses can be quite wide-ranging.
The table below shows how cash flow multiples are trending in the New Bedford area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in New Bedford, BizBuySell.com reports that the median cash flow for New Bedford area businesses was $76,581 in Q4 2008.
Tips for New Bedford, MA Business Buyers
Many buyers want to look at all available options, thinking they'll recognize what they're looking for when they see it. That approach is actually a waste of valuable time and energy and can lead to frustration. A better strategy is to define what you are looking for and then only look at businesses that meet your criteria. This useful business buying advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for New Bedford, MA 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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