Q1 2009 Costs to Buy a Business
How Much Is My Richmond Business Worth?
We just received the latest Richmond, Virginia business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Richmond, VA
According to statistics issued by BizBuySell.com, Richmond business-for-sale listings in Q1 2009 had a median asking price of $200,000.
That compares to a median ask price of $200,000 in Q1 2008. Richmond, VA business values are showing stability even in this tough economic environment.
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 Richmond company for much less. However, some Richmond businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Richmond business. When a company 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. An owner who wants $275,000 might actually get between $233,750 and $247,500.
Number of Richmond Businesses for Sale in the Dataset
The study data comprised 103 listings in the Richmond, VA metro area. Many of the businesses in the dataset are outside of Richmond, but they are in the area and so are likely representative of Richmond business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Richmond spanned 77 listings. The downward trend in the number of Richmond business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In Richmond, VA
In the Richmond, VA metro area, small businesses will usually sell for 0.92 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 $183,863. Keep in mind that this is just 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 $400,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 1.37 and the median revenue for listed businesses was $390,299.
Q1 2009 Cash Flow Multiples In Richmond, VA
Cash flow multiples are another popular technique to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Richmond, VA metro area was 3.21.
So, a company with cash flows of $150,000 might have an asking price of $481,843. 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 Richmond, BizBuySell.com reports that the median cash flow for Richmond area businesses was $80,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 4.36 and the median cash flow was $76,992.
Things to Consider When Selling a Business in Richmond, VA
When choosing a business broker, look for a broker that can maintain confidentiality and simultaneously get you the most qualified buyers. In addition, make sure the business broker has a good track record in facilitating negotiations between buyer and seller in a way that arrives at the best possible transaction. This helpful tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Richmond, 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 additional information.
Historical Data for Richmond, 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 Richmond, VA metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Richmond area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Richmond area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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