Q1 2009 Costs to Buy a Business
How Much Is My Carmel Business Worth?
We just received the latest Carmel, Indiana small business valuation trend data for First Quarter 2009.
Q1 2009 Business Valuations in Carmel, IN
Based on data compiled by BizBuySell.com, Carmel business-for-sale listings in Q1 2009 had a median asking price of $250,000.
That compares to a median ask price of $257,000 in Q1 2008. Given that Carmel, IN median business asking prices appear to be dropping, it suggests that larger Carmel businesses in may be holding off on selling until the economy turns around.
To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Carmel company for much less. Similarly, some Carmel businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Carmel business. When an owner lists a business 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 Carmel Businesses for Sale in the Dataset
The study data comprised 127 listings in the Indianapolis-Carmel, IN metro area. As such, some of the businesses used to derive the median valuation might be outside of Carmel, but they are close by and so are probably representative of Carmel business valuations.
In Q1 2008, just one year ago, there were 90 Carmel listings in the BizBuySell.com dataset. As a result of the recession, fewer Carmel business owners are selling because they hope to weather the storm and sell after the economy turns around.
Carmel, IN Q1 2009 Revenue Multiples
In the Indianapolis-Carmel, IN metro area, companies will typically sell for 0.76 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 business that has revenues of $200,000 might list for $152,283. Remember, however, that this is strictly 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 $396,000 in Q1 2009.
To give this some context, the Q1 2008 revenue multiple was 1.03 and the median revenue for listed businesses was $359,584.
Q1 2009 Cash Flow Multiples In Carmel, IN
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for businesses listed in the Indianapolis-Carmel, IN metro area was 3.46.
So, a business with cash flows of $150,000 might have an asking price of $519,672. That's only if the firm complies with the local average. Actual cash flow multiples are based on business specifics.
If you are interested in what cash flows are for a business in Carmel, BizBuySell.com reports that the median cash flow for Carmel area businesses was $86,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.74 and the median cash flow was $91,500.
Tips for Carmel, IN Business Sellers
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 Carmel, IN 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 published every quarter. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for additional information.
Historical Data for Carmel, IN Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Indianapolis-Carmel, IN metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Carmel area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Carmel area, based on BizBuySell.com's quarterly reports.
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