Buying a Business
Cost to Buy a Business in St. Petersburg
Considering purchasing a company in St. Petersburg, Florida? You're no doubt wondering how much a typical St. Petersburg, Florida business costs to buy.
Fortunately, the folks at BizBuySell.com have made some data available on what businesses are going for in St. Petersburg.
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 Florida, take a look at the BizBuySell Florida listings to get instant access to business-for-sale listings for St. Petersburg and other Florida municipalities.
Business Valuations in St. Petersburg, FL
According to BizBuySell.com, the median asking price for an St. Petersburg business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $205,000.
That was based on 963 listings in the Tampa-St. Petersburg-Clearwater, FL metro area. As such, some of the businesses used to derive the median valuation might be outside of St. Petersburg, but they are nearby and so are probably representative of St. Petersburg business valuations.
Remember 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 St. Petersburg business for much less. Having said that, some St. Petersburg businesses may cost much more.
Importantly, this is the asking price for an St. Petersburg business. Typically, when a company owner lists a company for sale, they start with an asking price that is higher than the ultimate 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 Tampa-St. Petersburg-Clearwater, FL metro area for the last 8 quarters.
Revenue Multiples In St. Petersburg, FL
In the Tampa-St. Petersburg-Clearwater, FL metro area, businesses will typically sell for 0.89 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this part of the country.
In other words, a business that has revenues of $200,000 might list for $177,399. Remember, however, that this is simply 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 St. Petersburg area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $352,000 in Q4 2008.
Cash Flow Multiples In St. Petersburg, FL
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 Tampa-St. Petersburg-Clearwater, FL metro area was 3.33.
So, a business with cash flows of $120,000 might have an asking price of $399,722. 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 St. Petersburg area, based on BizBuySell.com's quarterly reports.
In case you were wondering what typical cash flows are for a business in St. Petersburg, BizBuySell.com reports that the median cash flow for St. Petersburg area businesses was $86,878 in Q4 2008.
Things to Consider When Buying a Business in St. Petersburg, 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 St. Petersburg, 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 additional information.
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