Q1 2009 Costs to Buy a Business

How Much Is My Carlsbad Business Worth?

We just received the latest Carlsbad, California business valuation data for First Quarter 2009.

Q1 2009 Business Valuations in Carlsbad, CA

Based on data compiled by BizBuySell.com, Carlsbad business-for-sale listings in Q1 2009 had a median asking price of $199,000.

That compares to a median ask price of $220,000 in Q1 2008. Given that Carlsbad, CA median business asking prices appear to be dropping, it suggests that larger Carlsbad businesses in may be holding off on selling until the economy turns around.

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 Carlsbad company for much less. However, some Carlsbad businesses may be selling for much more.

Also, this is the asking price for a Carlsbad business. When a small business owner lists a company for sale, they typically set a price that ends up being more than the ultimate sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. If an owner lists a business for $150,000, it might end up selling for between $127,500 and $135,000.

Number of Carlsbad Businesses for Sale in the Dataset

The study data comprised 365 listings in the San Diego-Carlsbad-San Marcos, CA metro area. Many of the businesses in the dataset are outside of Carlsbad, but they are nearby and so are probably representative of Carlsbad business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for Carlsbad spanned 391 listings. The downward trend in the number of Carlsbad business-for-sale listings is indicative of the current down economy.

Q1 2009 Revenue Multiples In Carlsbad, CA

In the San Diego-Carlsbad-San Marcos, CA metro area, small businesses will typically sell for 0.64 times the selling company's revenues. This was the mean revenue multiple for Q1 2009 in this area of the country.

In other words, a business that has revenues of $200,000 might list for $127,781. Keep in mind that this is just an average for revenue multiples in Carlsbad and surrounding communities. Some small businesses 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 $358,000 in Q1 2009.

To put this in perspective, the Q1 2008 revenue multiple was 0.76 and the median revenue for listed businesses was $360,000.

Q1 2009 Cash Flow Multiples In Carlsbad, CA

Cash flow multiples are another useful method to value a business.

For Q1 2009, the average cash flow multiple for listed businesses in the San Diego-Carlsbad-San Marcos, CA metro area was 2.69.

So, a business with cash flows of $150,000 might have an asking price of $403,797. That's only if the firm complies with the local average. The actual distribution on revenue multiples for a given set of businesses can be quite wide-ranging.

In case you were wondering what typical cash flows are for a business in Carlsbad, BizBuySell.com found that the median cash flow for Carlsbad area businesses was $85,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.08 and the median cash flow was $84,000.

Things to Consider When Selling a Business in Carlsbad, CA

When selling a business, valuations will be based on your profits. So, be sure to sell a business at a point when your profits are doing well if you want to sell for a great price. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.

Business Valuations for Carlsbad, CA Businesses

If you are contemplating buying a business or selling a business and would like to value a specific business, 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 additional information.

Historical Data for Carlsbad, CA Business Valuations

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the San Diego-Carlsbad-San Marcos, CA metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$200,000
Q2 2007
$195,000
Q3 2007
$195,000
Q4 2007
$195,000
Q1 2008
$220,000
Q2 2008
$239,550
Q3 2008
$220,000
Q4 2008
$199,750
Q1 2009
$199,000

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

Quarter
Revenue Multiple
Q1 2007
0.83
Q2 2007
0.73
Q3 2007
0.83
Q4 2007
0.76
Q1 2008
0.76
Q2 2008
0.78
Q3 2008
0.73
Q4 2008
0.69
Q1 2009
0.64

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

Quarter
Median Cash
Flow Multiple
Q1 2007
3.14
Q2 2007
3.15
Q3 2007
3.35
Q4 2007
3.13
Q1 2008
3.08
Q2 2008
3.14
Q3 2008
2.94
Q4 2008
2.77
Q1 2009
2.69

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