Q1 2009 Costs to Buy a Business

How Much Is My Arden-Arcade Business Worth?

We just received the latest Arden-Arcade, California business-for-sale statistics.

Q1 2009 Business Valuations in Arden-Arcade, CA

Based on data compiled by BizBuySell.com, Arden-Arcade business-for-sale listings in Q1 2009 had a median asking price of $228,000.

That compares to a median ask price of $217,500 in Q1 2008. Because the median ask price for businesses for sale in Arden-Arcade has risen year over year, we can conclude that many smaller firms in Arden-Arcade are holding off on selling.

Please understand that this is the median asking price for a business. If you want to buy a business, you may be able to buy a Arden-Arcade company for much less. However, some Arden-Arcade businesses may be selling for much more.

Another thing to remember is that this is the asking price for a Arden-Arcade business. When a business owner lists a company for sale, they typically set a price that ends up being more than the eventual sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. So, a business listed for $100,000 might sell for between $85,000 and $90,000.

Number of Arden-Arcade Businesses for Sale in the Dataset

The study data comprised 190 listings in the Sacramento--Arden-Arcade--Roseville, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Arden-Arcade, but they are in the area and so are probably representative of Arden-Arcade business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for Arden-Arcade spanned 214 listings. The downward trend in the number of Arden-Arcade business-for-sale listings is indicative of the current down economy.

Arden-Arcade, CA Q1 2009 Revenue Multiples

In the Sacramento--Arden-Arcade--Roseville, CA metro area, businesses will usually sell for 0.73 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this part of the country.

In other words, a firm with revenues of $200,000 might list for $145,091. Keep in mind that this is just an average for revenue multiples in the area. Some firms will have higher revenue multiples and others will have lower revenue multiples.

According to BizBuySell.com, the median revenues for its business-for-sale listings was $451,156 in Q1 2009.

To put this in perspective, the Q1 2008 revenue multiple was 0.81 and the median revenue for listed businesses was $397,610.

Q1 2009 Cash Flow Multiples In Arden-Arcade, CA

Cash flow multiples are another popular technique to value a business.

For Q1 2009, the average cash flow multiple for listed businesses in the Sacramento--Arden-Arcade--Roseville, CA metro area was 3.24.

So, a business with cash flows of $150,000 might have an asking price of $486,106. That calculation is dependent on the business selling for the area's average multiple. Most businesses will not conform to industry- or area averages.

If you are interested in what cash flows are for a business in Arden-Arcade, BizBuySell.com determined that the median cash flow for Arden-Arcade area businesses was $99,361 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.62 and the median cash flow was $90,000.

Things to Consider When Selling a Business in Arden-Arcade, CA

Selling a business can be a full-time job in and of itself. If you sell on your own, without assistance from a business broker, you may be distracted from running the business, which can result in a deterioriation in business results and a lower sale price. This helpful advice was provided by Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.

Business Valuations for Arden-Arcade, CA Businesses

If you are contemplating buying a business or selling a business and would like to look at comparables in the area, we suggest you try the BizBuySell.com Business Valuation Tool. You can modify the dataset that creates business valuation estimates to meet your specific criteria. As a bonus, 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 report that tracks trends in the business-for-sale marketplace. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.

Historical Data for Arden-Arcade, CA Business Valuations

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses for sale in the Sacramento--Arden-Arcade--Roseville, CA metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$299,900
Q2 2007
$249,000
Q3 2007
$240,000
Q4 2007
$225,000
Q1 2008
$217,500
Q2 2008
$199,000
Q3 2008
$199,000
Q4 2008
$229,450
Q1 2009
$228,000

Here is how median revenue multiples are trending in the Arden-Arcade area, based on BizBuySell.com's quarterly reports.

Quarter
Revenue Multiple
Q1 2007
0.67
Q2 2007
0.73
Q3 2007
0.76
Q4 2007
0.74
Q1 2008
0.81
Q2 2008
0.77
Q3 2008
0.76
Q4 2008
0.72
Q1 2009
0.73

The table below shows how cash flow multiples are trending in the Arden-Arcade area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
2.72
Q2 2007
3.19
Q3 2007
3.47
Q4 2007
3.65
Q1 2008
3.62
Q2 2008
3.33
Q3 2008
3.18
Q4 2008
3.24
Q1 2009
3.24

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