Buying a Business
Cost to Buy a Business in Solano
Planning on buying a Solano, California business? You're no doubt wondering how much a typical Solano, California business costs to buy.
Luckily, the folks at BizBuySell.com have made some data available on what it costs to buy a business in Solano.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. When a business broker in a local city has a listing, the broker will typically post it 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 California, check out the BizBuySell California listings to see the latest business-for-sale listings for Solano and other California cities.
Solano, CA Business Valuations
According to BizBuySell.com, the median asking price for an Solano business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $222,000.
That was based on 191 listings in the Contra Costa-Alameda-Solano, CA metro area. Many of the businesses in the dataset are outside of Solano, but they are in the area and so are likely representative of Solano 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 Solano business for much less. Having said that, some Solano businesses may cost much more.
Another thing you should know is that this is the asking price for an Solano 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 ratios depend on deal specifics but typically might be between 0.85 and 0.90. So, a company listed for $125,000 would often sell for between $106,250 and $112,500.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Contra Costa-Alameda-Solano, CA metro area for the last 8 quarters.
Solano, CA Revenue Multiples
In the Contra Costa-Alameda-Solano, CA metro area, businesses will typically sell for 0.70 times the selling company's revenues. This was the mean revenue multiple for Q4 2008 in this part of the country.
In other words, a firm with revenues of $200,000 might list for $139,777. Remember, however, that this is simply an average for revenue multiples in Solano and surrounding communities. Some entities will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are moving in the Solano area, based on BizBuySell.com's economic data.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $443,827 in Q4 2008.
Cash Flow Multiples In Solano, CA
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 Contra Costa-Alameda-Solano, CA metro area was 3.44.
So, a business with cash flows of $120,000 might have an asking price of $413,027. That math only works if the business sells for the area's average multiple. Most businesses will not conform to industry- or area averages.
The table below shows how cash flow multiples are trending in the Solano area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Solano, BizBuySell.com reports that the median cash flow for Solano area businesses was $100,000 in Q4 2008.
Things to Consider When Buying a Business in Solano, CA
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 Solano, CA 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 more information.
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