Q1 2009 Costs to Buy a Business

How Much Is My Hartford Business Worth?

BizBuySell.com has just released its Hartford, Connecticut business-for-sale statistics.

Q1 2009 Business Valuations in Hartford, CT

According to statistics issued by BizBuySell.com, Hartford business-for-sale listings in Q1 2009 had a median asking price of $200,000.

That compares to a median ask price of $175,000 in Q1 2008. Because the median ask price for businesses for sale in Hartford has risen year over year, we can conclude that many smaller firms in Hartford 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 Hartford company for much less. However, some Hartford businesses may be selling for much more.

Another thing to remember is that this is the asking price for a Hartford business. When a business 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. As an example, a company listed for $125,000 would often sell for between $106,250 and $112,500.

Number of Hartford Businesses for Sale in the Dataset

The study data comprised 181 listings in the Hartford-West Hartford-East Hartford, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of Hartford, but they are nearby and so are probably representative of Hartford business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for Hartford spanned 204 listings. The downward trend in the number of Hartford business-for-sale listings is indicative of the current down economy.

Hartford, CT Q1 2009 Revenue Multiples

In the Hartford-West Hartford-East Hartford, CT metro area, businesses will usually sell for 0.62 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 $124,455. Remember, however, that this is in fact an average for revenue multiples in the area. Some entities 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 $425,000 in Q1 2009.

To put this in perspective, the Q1 2008 revenue multiple was 0.63 and the median revenue for listed businesses was $357,000.

Q1 2009 Cash Flow Multiples In Hartford, CT

Cash flow multiples are another common way to value a business.

For Q1 2009, the average cash flow multiple for listed businesses in the Hartford-West Hartford-East Hartford, CT metro area was 3.03.

So, a business with cash flows of $150,000 might have an asking price of $454,127. That calculation is dependent on the business selling for the area's average multiple. Most businesses will not conform to industry- or area averages.

In case you were wondering what typical cash flows are for a business in Hartford, BizBuySell.com reports that the median cash flow for Hartford area businesses was $93,960 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 2.87 and the median cash flow was $87,187.

Things to Consider When Selling a Business in Hartford, CT

Don't assume that the price you initially negotiate with a buyer will stay the same all the way to closing. During due diligence, the buyer may find some blemishes on the businesses that lead them to lower their offer. This is a natural part of the process and should be expected. This helpful business selling tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.

Business Valuations for Hartford, CT 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 additional information.

Historical Data for Hartford, CT 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 Hartford-West Hartford-East Hartford, CT metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$195,000
Q2 2007
$174,950
Q3 2007
$175,000
Q4 2007
$177,000
Q1 2008
$175,000
Q2 2008
$179,000
Q3 2008
$175,000
Q4 2008
$179,500
Q1 2009
$200,000

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

Quarter
Revenue Multiple
Q1 2007
0.64
Q2 2007
0.63
Q3 2007
0.62
Q4 2007
0.62
Q1 2008
0.63
Q2 2008
0.66
Q3 2008
0.62
Q4 2008
0.61
Q1 2009
0.62

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

Quarter
Median Cash
Flow Multiple
Q1 2007
2.94
Q2 2007
2.57
Q3 2007
2.67
Q4 2007
2.80
Q1 2008
2.87
Q2 2008
2.93
Q3 2008
2.80
Q4 2008
2.74
Q1 2009
3.03

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