Buying a Business
Cost to Buy a Business in Orlando
If you want to buy a business in Orlando, Florida, you're no doubt wondering how much a typical Orlando, Florida business costs to buy.
The good news is the team at BizBuySell.com has made some data available on what it costs to buy a business in Orlando.
BizBuySell.com is the biggest business-for-sale listings site on the Internet, offering over 50,000 businesses for sale at any given time. 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, peruse the BizBuySell Florida listings to see the latest business-for-sale listings for Orlando and other Florida cities.
Business Valuations in Orlando, FL
According to BizBuySell.com, the median asking price for an Orlando business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $199,900.
That was based on 941 listings in the Orlando-Kissimmee, FL metro area. As such, some of the businesses used to derive the median valuation might be outside of Orlando, but they are in the area and so are likely representative of Orlando 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 Orlando business for much less. The flip side is that some Orlando businesses may cost much more.
Another thing you should know is that this is the asking price for an Orlando business. Typically, when an 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 Orlando-Kissimmee, FL metro area for the last 8 quarters.
Orlando, FL Revenue Multiples
In the Orlando-Kissimmee, FL metro area, businesses will typically sell for 0.84 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 $167,195. Keep in mind that this is in fact an average for revenue multiples in Orlando and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are changing in the Orlando area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $336,000 in Q4 2008.
Cash Flow Multiples In Orlando, FL
Another useful technique to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Orlando-Kissimmee, FL metro area was 2.97.
So, a firm with cash flows of $120,000 might have an asking price of $356,638. That's if the business fits the area average. Cash flow multiples can vary considerably based on many factors.
The table below shows how cash flow multiples are trending in the Orlando area, based on BizBuySell.com's quarterly reports.
Flow Multiple
In case you were wondering what typical cash flows are for a business in Orlando, BizBuySell.com reports that the median cash flow for Orlando area businesses was $87,462 in Q4 2008.
Things to Consider When Buying a Business in Orlando, 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 Orlando, FL 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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