Q1 2009 Costs to Buy a Business
How Much Is My Long Beach Business Worth?
We just received the latest Long Beach, California small business valuation trend data for First Quarter 2009.
Q1 2009 Business Valuations in Long Beach, CA
Based on data compiled by BizBuySell.com, Long Beach business-for-sale listings in Q1 2009 had a median asking price of $230,000.
That compares to a median ask price of $225,000 in Q1 2008. Because the median ask price for businesses for sale in Long Beach has risen year over year, we can conclude that many smaller firms in Long Beach 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 Long Beach company for much less. Alternatively, some Long Beach businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Long Beach 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 depends on deal specifics. Based on this metric, a business initially priced at $225,000 might sell for between $191,250 and $202,500.
Number of Long Beach Businesses for Sale in the Dataset
The study data comprised 3978 listings in the Los Angeles-Long Beach-Santa Ana, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Long Beach, but they are nearby and so are probably representative of Long Beach business valuations.
In Q1 2008, just one year ago, there were 4059 Long Beach listings in the BizBuySell.com dataset. As a result of the recession, fewer Long Beach business owners are selling because they hope to weather the storm and sell after the economy turns around.
Long Beach, CA Q1 2009 Revenue Multiples
In the Los Angeles-Long Beach-Santa Ana, CA metro area, businesses will typically sell for 0.79 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 firm with revenues of $200,000 might list for $158,588. Keep in mind that this is in fact 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 $365,000 in Q1 2009.
In terms of trending year over year, the Q1 2008 revenue multiple was 0.83 and the median revenue for listed businesses was $360,000.
Q1 2009 Cash Flow Multiples In Long Beach, CA
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Los Angeles-Long Beach-Santa Ana, CA metro area was 2.97.
So, a business with cash flows of $150,000 might have an asking price of $446,200. 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 Long Beach, BizBuySell.com reports that the median cash flow for Long Beach area businesses was $94,367 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.01 and the median cash flow was $92,000.
Tips for Long Beach, CA Business Sellers
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 Long Beach, 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 Long Beach, CA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Los Angeles-Long Beach-Santa Ana, CA metro area for the last 9 quarters.
Here is how median revenue multiples are tracking in the Long Beach area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Long Beach area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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