Q1 2009 Costs to Buy a Business

How Much Is My San Bernardino Business Worth?

We just received the latest San Bernardino, California business valuation data for First Quarter 2009.

Q1 2009 Business Valuations in San Bernardino, CA

Based on data compiled by BizBuySell.com, San Bernardino business-for-sale listings in Q1 2009 had a median asking price of $249,000.

That compares to a median ask price of $275,000 in Q1 2008. One interpretation of the lower median asking price is that San Bernardino, CA sellers are dropping their asking prices in light of market conditions.

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 San Bernardino company for much less. However, some San Bernardino businesses may be selling for much more.

Another thing to remember is that this is the asking price for a San Bernardino business. When a small business owner lists a business for sale, they typically set a price that ends up being more than the ultimate sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it varies considerably. In practice, this means a business listed for $250,000 would go for between $212,500 and $225,000.

Number of San Bernardino Businesses for Sale in the Dataset

The study data comprised 601 listings in the Riverside-San Bernardino-Ontario, CA metro area. Many of the businesses in the dataset are outside of San Bernardino, but they are in the area and so are probably representative of San Bernardino business valuations.

In Q1 2008, just one year ago, there were 620 San Bernardino listings in the BizBuySell.com dataset. As a result of the recession, fewer San Bernardino business owners are selling because they hope to weather the storm and sell after the economy turns around.

Q1 2009 Revenue Multiples In San Bernardino, CA

In the Riverside-San Bernardino-Ontario, CA metro area, small businesses will typically sell for 0.81 times the selling company's revenues. This was the mean revenue multiple for Q1 2009 in this part of the country.

In other words, a business that has revenues of $200,000 might list for $162,436. Remember, however, that this is only an average for revenue multiples in the area. 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 $435,000 in Q1 2009.

To give this some context, the Q1 2008 revenue multiple was 0.83 and the median revenue for listed businesses was $500,000.

Q1 2009 Cash Flow Multiples In San Bernardino, CA

Cash flow multiples are another popular technique to value a business.

For Q1 2009, the average cash flow multiple for listed businesses in the Riverside-San Bernardino-Ontario, CA metro area was 3.16.

So, a business with cash flows of $150,000 might have an asking price of $473,375. That calculation is dependent on the business selling for the area's average multiple. Cash flow multiples will usually vary considerably based on many factors.

If you are interested in what cash flows are for a business in San Bernardino, BizBuySell.com determined that the median cash flow for San Bernardino area businesses was $100,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.25 and the median cash flow was $107,326.

Tips for San Bernardino, CA Business Sellers

Don't assume that the price you initially negotiate with a buyer will stay the same all the way to closing. During due diligence, the buyer may find some blemishes on the businesses that lead them to lower their offer. This is a natural part of the process and should be expected. This helpful business selling tip comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.

Business Valuations for San Bernardino, CA Businesses

If you are contemplating buying a business or selling a business and would like to get an estimated business valuation, 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 San Bernardino, CA Business Valuations

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Riverside-San Bernardino-Ontario, CA metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$270,000
Q2 2007
$214,000
Q3 2007
$250,000
Q4 2007
$270,000
Q1 2008
$275,000
Q2 2008
$275,000
Q3 2008
$250,000
Q4 2008
$250,000
Q1 2009
$249,000

Here is how median revenue multiples are tracking in the San Bernardino area, based on BizBuySell.com's data.

Quarter
Revenue Multiple
Q1 2007
0.87
Q2 2007
0.92
Q3 2007
0.89
Q4 2007
0.89
Q1 2008
0.83
Q2 2008
0.87
Q3 2008
0.80
Q4 2008
0.82
Q1 2009
0.81

Here is how cash flow multiples are trending in the San Bernardino area, based on BizBuySell.com's quarterly reports.

Quarter
Median Cash
Flow Multiple
Q1 2007
3.11
Q2 2007
3.21
Q3 2007
3.21
Q4 2007
3.27
Q1 2008
3.25
Q2 2008
3.32
Q3 2008
3.06
Q4 2008
3.12
Q1 2009
3.16

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