Q1 2009 Costs to Buy a Business

How Much Is My New Haven Business Worth?

We just received the latest New Haven, Connecticut business valuation data for First Quarter 2009.

Q1 2009 Business Valuations in New Haven, CT

According to statistics issued by BizBuySell.com, New Haven business-for-sale listings in Q1 2009 had a median asking price of $195,000.

That compares to a median ask price of $183,900 in Q1 2008. With median asking prices for New Haven, CT businesses for sale trending up, we can conclude that only businesses that know they can command a premium price are willing to sell in this tough market.

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 New Haven company for much less. However, some New Haven businesses may be selling for much more.

Also, this is the asking price for a New Haven business. When a company 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 New Haven Businesses for Sale in the Dataset

The study data comprised 134 listings in the New Haven-Milford, CT metro area. As such, some of the businesses used to derive the median valuation might be outside of New Haven, but they are in the area and so are likely representative of New Haven business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for New Haven spanned 145 listings. The downward trend in the number of New Haven business-for-sale listings is indicative of the current down economy.

Q1 2009 Revenue Multiples In New Haven, CT

In the New Haven-Milford, CT metro area, small businesses will usually sell for 0.64 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 $128,548. Remember, however, that this is just an average for revenue multiples in New Haven and surrounding communities. Some small businesses 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 $360,250 in Q1 2009.

To put this in perspective, the Q1 2008 revenue multiple was 0.76 and the median revenue for listed businesses was $300,000.

Q1 2009 Cash Flow Multiples In New Haven, CT

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

For Q1 2009, the average cash flow multiple for businesses listed in the New Haven-Milford, CT metro area was 2.94.

So, a business with cash flows of $150,000 might have an asking price of $441,221. That's only if the firm complies with the local average. Cash flow multiples will usually vary considerably based on many factors.

If you are interested in what cash flows are for a business in New Haven, BizBuySell.com reports that the median cash flow for New Haven area businesses was $97,790 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.04 and the median cash flow was $78,000.

Things to Consider When Selling a Business in New Haven, CT

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 New Haven, CT 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 more information.

Historical Data for New Haven, 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 New Haven-Milford, CT metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$189,000
Q2 2007
$189,000
Q3 2007
$175,000
Q4 2007
$179,000
Q1 2008
$183,900
Q2 2008
$181,900
Q3 2008
$175,000
Q4 2008
$175,000
Q1 2009
$195,000

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

Quarter
Revenue Multiple
Q1 2007
0.74
Q2 2007
0.80
Q3 2007
0.73
Q4 2007
0.76
Q1 2008
0.76
Q2 2008
0.73
Q3 2008
0.71
Q4 2008
0.70
Q1 2009
0.64

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

Quarter
Median Cash
Flow Multiple
Q1 2007
3.11
Q2 2007
2.99
Q3 2007
3.03
Q4 2007
3.01
Q1 2008
3.04
Q2 2008
2.85
Q3 2008
2.77
Q4 2008
2.84
Q1 2009
2.94

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