Q1 2009 Costs to Buy a Business
How Much Is My Clearwater Business Worth?
We just received the latest Clearwater, Florida business valuation data for First Quarter 2009.
Clearwater, FL Q1 2009 Business Valuations
According to statistics issued by BizBuySell.com, Clearwater business-for-sale listings in Q1 2009 had a median asking price of $199,000.
That compares to a median ask price of $225,000 in Q1 2008. Given that Clearwater, FL median business asking prices appear to be dropping, it suggests that larger Clearwater 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 Clearwater company for much less. Similarly, some Clearwater businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Clearwater 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. With this in mind, a business listed for $175,000 might sell for between $148,750 and $157,500.
Number of Clearwater Businesses for Sale in the Dataset
The study data comprised 938 listings in the Tampa-St. Petersburg-Clearwater, FL metro area. Many of the businesses in the dataset are outside of Clearwater, but they are in the area and so are probably representative of Clearwater business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Clearwater spanned 984 listings. The downward trend in the number of Clearwater business-for-sale listings is indicative of the current down economy.
Clearwater, FL Q1 2009 Revenue Multiples
In the Tampa-St. Petersburg-Clearwater, FL metro area, businesses will typically sell for 0.94 times the selling company's revenues. That 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 $187,222. Remember, however, that this is only 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 $341,478 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.98 and the median revenue for listed businesses was $325,000.
Q1 2009 Cash Flow Multiples In Clearwater, FL
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Tampa-St. Petersburg-Clearwater, FL metro area was 3.45.
So, a business with cash flows of $150,000 might have an asking price of $517,630. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
In case you were wondering what typical cash flows are for a business in Clearwater, BizBuySell.com reports that the median cash flow for Clearwater area businesses was $80,050 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.45 and the median cash flow was $84,596.
Things to Consider When Selling a Business in Clearwater, FL
Most business sales involve seller financing, especially in this enviroment when credit is tight. You have to finance as much as 70% of the purchase price. Typically, you would structure the deal to be paid off in full within four to five years. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Clearwater, FL Businesses
If you are contemplating buying a business or selling a business and would like to find out how much a business is worth, 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 Clearwater, FL Business Valuations
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 9 quarters.
Here is how median revenue multiples are moving in the Clearwater area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Clearwater area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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