Buying a Business
Cost to Buy a Business in Troy
If you want to buy a business in Troy, New York, you've come to the right place to get statistics and trend data on Troy, New York business-for-sale transactions.
The good news is the folks at BizBuySell.com have made some data available on what it costs to buy a business in Troy.
BizBuySell.com is the Internet's largest and most heavily trafficked business for sale marketplace. 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 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 Troy and other New York municipalities.
Business Valuations in Troy, NY
According to BizBuySell.com, the median asking price for an Troy business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $495,000.
That was based on 70 listings in the Albany-Schenectady-Troy, NY metro area. As such, some of the businesses used to derive the median valuation might be outside of Troy, but they are in the area and so are probably representative of Troy 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 Troy business for much less. At the same time, some Troy businesses may cost much more.
Another thing you should know is that this is the asking price for an Troy business. Typically, when an owner lists a business for sale, they start with an asking price that is higher than the final sale price. The sale-price-to-asking-price ratios depend on deal specifics but typically might be between 0.85 and 0.90. Given this industry norm, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses for sale in the Albany-Schenectady-Troy, NY metro area for the last 8 quarters.
Revenue Multiples In Troy, NY
In the Albany-Schenectady-Troy, NY metro area, small businesses will typically sell for 2.02 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 $404,806. Remember, however, that this is just an average for revenue multiples in the area. Some businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are trending in the Troy area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $453,000 in Q4 2008.
Cash Flow Multiples In Troy, NY
Another popular way to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for businesses listed in the Albany-Schenectady-Troy, NY metro area was 4.94.
So, a business with cash flows of $120,000 might have an asking price of $592,955. That's if the business fits the area average. Actual cash flow multiples can vary considerably from one business to another.
The table below shows how cash flow multiples are trending in the Troy area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Troy, BizBuySell.com determined that the median cash flow for Troy area businesses was $133,757 in Q4 2008.
Things to Consider When Buying a Business in Troy, NY
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 Troy, NY 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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