Q1 2009 Costs to Buy a Business
How Much Is My Mentor Business Worth?
We just received the latest Mentor, Ohio business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Mentor, OH
According to statistics issued by BizBuySell.com, Mentor business-for-sale listings in Q1 2009 had a median asking price of $177,500.
That compares to a median ask price of $199,000 in Q1 2008. Given that Mentor, OH median business asking prices appear to be dropping, it suggests that larger Mentor 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 Mentor company for much less. Similarly, some Mentor businesses may be selling for much more.
Also, this is the asking price for a Mentor business. When a small 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. Based on this metric, a business initially priced at $225,000 might sell for between $191,250 and $202,500.
Number of Mentor Businesses for Sale in the Dataset
The study data comprised 96 listings in the Cleveland-Elyria-Mentor, OH metro area. As such, some of the businesses used to derive the median valuation might be outside of Mentor, but they are close by and so are likely representative of Mentor business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Mentor spanned 163 listings. In a market where you would think fewer business owners would be selling it's a bit surprising to see more Mentor business-for-sale listings.
Mentor, OH Q1 2009 Revenue Multiples
In the Cleveland-Elyria-Mentor, OH metro area, businesses will usually sell for 0.75 times the selling company's revenues. The data indicates that is 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 $150,020. 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 $306,714 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.69 and the median revenue for listed businesses was $380,894.
Q1 2009 Cash Flow Multiples In Mentor, OH
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Cleveland-Elyria-Mentor, OH metro area was 3.45.
So, a firm with cash flows of $150,000 might have an asking price of $518,246. 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 Mentor, BizBuySell.com reports that the median cash flow for Mentor area businesses was $64,918 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.32 and the median cash flow was $70,452.
Things to Consider When Selling a Business in Mentor, OH
It's critical to keep the potential sale of your business as confidential as possible. If that confidentiality is compromised, you risk losing customers, employees and vendors. Loose lips sink ships...and sink business-for-sale transactions as well! This useful business selling advice comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Mentor, OH 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 more information.
Historical Data for Mentor, OH Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Cleveland-Elyria-Mentor, OH metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Mentor area, based on BizBuySell.com's economic data.
The table below shows how cash flow multiples are trending in the Mentor area, based on BizBuySell.com's quarterly reports.
Flow Multiple
Share this article
Additional Resources for Entrepreneurs