Buying a Business
Cost to Buy a Business in Norwalk
Planning on buying a Norwalk, Connecticut business? You've come to the right place to get statistics and trend data on Norwalk, Connecticut business-for-sale transactions.
Fortunately, the folks at BizBuySell.com have made some data available on what businesses are going for in Norwalk.
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 Connecticut, check out the BizBuySell Connecticut listings to see the latest business-for-sale listings for Norwalk and other Connecticut towns.
Norwalk, CT Business Valuations
According to BizBuySell.com, the median asking price for an Norwalk business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $255,000.
That was based on 156 listings in the Bridgeport-Stamford-Norwalk, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of Norwalk, but they are in the area and so are likely representative of Norwalk 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 Norwalk business for much less. At the same time, some Norwalk businesses may cost much more.
Another thing you should know is that this is the asking price for an Norwalk 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. 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 Bridgeport-Stamford-Norwalk, CT metro area for the last 8 quarters.
Norwalk, CT Revenue Multiples
In the Bridgeport-Stamford-Norwalk, CT metro area, small businesses will usually sell for 0.77 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 $154,117. Keep in mind that this is just an average for revenue multiples in the area. Some entities will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are tracking in the Norwalk area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $395,000 in Q4 2008.
Cash Flow Multiples In Norwalk, CT
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 Bridgeport-Stamford-Norwalk, CT metro area was 2.92.
So, a business with cash flows of $120,000 might have an asking price of $350,431. 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 Norwalk area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Norwalk, BizBuySell.com reports that the median cash flow for Norwalk area businesses was $98,754 in Q4 2008.
Things to Consider When Buying a Business in Norwalk, CT
It is important to keep in mind that no business is perfect. It is not unusual for buyers to find a few inconsistencies or anomalies in a business when they get to the due diligence stage. These should be questioned and understood. If the information turns out to be structural or material, then you may consider either canceling a deal or renegotiating a deal based on the new facts. However, be careful not to over-react and assume that any deviation is a deal-killer. Oftentimes, these differences can be explained and overcome with thoughtful communication between all the parties. This good business buying tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Norwalk, CT 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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