Buying a Business
Cost to Buy a Business in Rochester
Considering purchasing a company in Rochester, New York? You've come to the right place to get statistics and trend data on Rochester, New York business-for-sale transactions.
Fortunately, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Rochester.
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. They also have many FSBO (for sale by owner) business-for-sale listings.
If you are looking to buy a business in New York, check out the BizBuySell New York listings to see the latest business-for-sale listings for Rochester and other New York cities.
Business Valuations in Rochester, NY
Based on the BizBuySell.com data, the median asking price for an Rochester business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $275,000.
That was based on 43 listings in the Rochester, NY metro area. Many of the businesses in the dataset are outside of Rochester, but they are in the area and so are probably representative of Rochester 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 Rochester business for much less. At the same time, some Rochester businesses may cost much more.
Importantly, this is the asking price for an Rochester business. Typically, when a small 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 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 Rochester, NY metro area for the last 8 quarters.
Rochester, NY Revenue Multiples
In the Rochester, NY metro area, businesses will typically sell for 1.38 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 $275,746. Remember, however, that this is in fact an average for revenue multiples in Rochester 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 Rochester area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $405,000 in Q4 2008.
Cash Flow Multiples In Rochester, NY
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the Rochester, NY metro area was 4.71.
So, a business with cash flows of $120,000 might have an asking price of $564,666. 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 Rochester area, based on BizBuySell.com's quarterly reports.
If you are interested in what cash flows are for a business in Rochester, BizBuySell.com determined that the median cash flow for Rochester area businesses was $87,334 in Q4 2008.
Things to Consider When Buying a Business in Rochester, NY
Sellers want to be sure their business will continue to be successful. They want to find a buyer who has experience and will take care of the company's employees. As such, you are selling yourself to the current business owner and the professional team that represents the seller. You may think you are buying, but you also need to be selling. This useful tip for buying a business was provided by Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Rochester, NY 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 additional information.
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