Buying a Business
Cost to Buy a Business in Pittsburgh
Considering purchasing a company in Pittsburgh, Pennsylvania? You've come to the right place to get statistics and trend data on Pittsburgh, Pennsylvania business-for-sale transactions.
Fortunately, a company called BizBuySell.com has made some data available on what it costs to buy a business in Pittsburgh.
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 are looking to buy a business in Pennsylvania, check out the BizBuySell Pennsylvania listings to see the latest business-for-sale listings for Pittsburgh and other Pennsylvania towns.
Business Valuations in Pittsburgh, PA
According to BizBuySell.com, the median asking price for an Pittsburgh business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $235,000.
That was based on 108 listings in the Pittsburgh, PA metro area. As such, some of the businesses used to derive the median valuation might be outside of Pittsburgh, but they are in the area and so are probably representative of Pittsburgh 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 Pittsburgh business for much less. At the same time, some Pittsburgh businesses may cost much more.
Another thing you should know is that this is the asking price for an Pittsburgh business. Typically, when a company 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 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 Pittsburgh, PA metro area for the last 8 quarters.
Pittsburgh, PA Revenue Multiples
In the Pittsburgh, PA metro area, businesses will typically sell for 0.91 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 business that has revenues of $200,000 might list for $182,542. Keep in mind that this is in fact an average for revenue multiples in the area. Some firms will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Pittsburgh area, based on BizBuySell.com's data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $363,000 in Q4 2008.
Cash Flow Multiples In Pittsburgh, PA
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 Pittsburgh, PA metro area was 3.77.
So, a business with cash flows of $120,000 might have an asking price of $452,795. 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 Pittsburgh area, based on BizBuySell.com's quarterly reports.
In case you were wondering what typical cash flows are for a business in Pittsburgh, BizBuySell.com reports that the median cash flow for Pittsburgh area businesses was $70,000 in Q4 2008.
Things to Consider When Buying a Business in Pittsburgh, PA
Be sure to assess your financial situation. Be sure to carefully consider how much money you need and how much you want to earn. Your expectations need to be realistic and they must be something that can be achieved by the type of business you are searching for. This excellent business buying tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Pittsburgh, PA 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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