Buying a Business
Cost to Buy a Business in Portland
Considering purchasing a company in Portland, Oregon? You'd do well to learn a little bit about trends in Portland, Oregon business valuations.
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Portland.
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 Oregon, peruse the BizBuySell Oregon listings to see the latest business-for-sale listings for Portland and other Oregon towns.
Portland, OR Business Valuations
Based on the BizBuySell.com data, the median asking price for an Portland business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $289,500.
That was based on 199 listings in the Portland-Vancouver-Beaverton, OR-WA metro area. As such, some of the businesses used to derive the median valuation might be outside of Portland, but they are in the area and so are probably representative of Portland 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 Portland business for much less. At the same time, some Portland businesses may cost much more.
Another thing you should know is that this is the asking price for an Portland 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. As such, a business listed for $175,000 might sell for between $148,750 and $157,500.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Portland-Vancouver-Beaverton, OR-WA metro area for the last 8 quarters.
Portland, OR Revenue Multiples
In the Portland-Vancouver-Beaverton, OR-WA metro area, small businesses will typically sell for 0.83 times the selling company's revenues. This 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 $166,030. Remember, however, that this is in fact 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 moving in the Portland area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $436,000 in Q4 2008.
Cash Flow Multiples In Portland, OR
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 Portland-Vancouver-Beaverton, OR-WA metro area was 3.47.
So, a company with cash flows of $120,000 might have an asking price of $415,881. 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 Portland area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Portland, BizBuySell.com found that the median cash flow for Portland area businesses was $100,000 in Q4 2008.
Things to Consider When Buying a Business in Portland, OR
Never underestimate what it will take to be a successful entrepreneur. It's important to understand that owners work long hours, and, in many casees, it can take a while before a business generates sufficient cash flow to pay the owner well. This useful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Portland, OR 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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