Q1 2009 Costs to Buy a Business
How Much Is My Newport News Business Worth?
Every quarter, BizBuySell.com published business valuation data, and we now have their latest Newport News, Virginia business-for-sale statistics.
Q1 2009 Business Valuations in Newport News, VA
According to statistics issued by BizBuySell.com, Newport News business-for-sale listings in Q1 2009 had a median asking price of $280,000.
That compares to a median ask price of $225,000 in Q1 2008. Because the median ask price for businesses for sale in Newport News has risen year over year, we can conclude that many smaller firms in Newport News 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 Newport News company for much less. However, some Newport News businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Newport News business. When an 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. Based on this metric, a business initially priced at $225,000 might sell for between $191,250 and $202,500.
Number of Newport News Businesses for Sale in the Dataset
The study data comprised 209 listings in the Virginia Beach-Norfolk-Newport News, VA-NC metro area. Many of the businesses in the dataset are outside of Newport News, but they are in the area and so are probably representative of Newport News business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Newport News spanned 216 listings. The downward trend in the number of Newport News business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Newport News, VA
In the Virginia Beach-Norfolk-Newport News, VA-NC metro area, businesses will typically sell for 0.77 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 business that has revenues of $200,000 might list for $153,296. 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 $425,000 in Q1 2009.
To give this some context, the Q1 2008 revenue multiple was 0.74 and the median revenue for listed businesses was $400,000.
Q1 2009 Cash Flow Multiples In Newport News, VA
Cash flow multiples are another useful method to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Virginia Beach-Norfolk-Newport News, VA-NC metro area was 3.33.
So, a business with cash flows of $150,000 might have an asking price of $500,065. That calculation is dependent on the business selling for the area's average multiple. Actual cash flow multiples are based on business specifics.
If you are interested in what cash flows are for a business in Newport News, BizBuySell.com found that the median cash flow for Newport News area businesses was $96,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.23 and the median cash flow was $90,000.
Tips for Newport News, VA Business Sellers
In this difficult econonmic environment, sellers must be bankers. That means you should offer seller financing to prospective buyers because you, as a seller, may be their only viable source of financing. This tip for selling a business was provided by Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Newport News, VA 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 Newport News, VA Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Virginia Beach-Norfolk-Newport News, VA-NC metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Newport News area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Newport News area, based on BizBuySell.com's quarterly reports.
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