Q1 2009 Costs to Buy a Business
How Much Is My San Diego Business Worth?
We just received the latest San Diego, California business-for-sale statistics.
Q1 2009 Business Valuations in San Diego, CA
According to statistics issued by BizBuySell.com, San Diego business-for-sale listings in Q1 2009 had a median asking price of $199,000.
That compares to a median ask price of $220,000 in Q1 2008. Given that San Diego, CA median business asking prices appear to be dropping, it suggests that larger San Diego 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 San Diego company for much less. However, some San Diego businesses may be selling for much more.
Also, this is the asking price for a San Diego 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 depends on deal specifics. Given this industry statistic, if a small business owner were to list a company for $300,000, it might sell for between $255,000 and $270,000.
Number of San Diego Businesses for Sale in the Dataset
The study data comprised 365 listings in the San Diego-Carlsbad-San Marcos, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of San Diego, but they are close by and so are likely representative of San Diego business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for San Diego spanned 391 listings. The downward trend in the number of San Diego business-for-sale listings is indicative of the current down economy.
Q1 2009 Revenue Multiples In San Diego, CA
In the San Diego-Carlsbad-San Marcos, CA metro area, companies will typically sell for 0.64 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this metro area.
In other words, a firm with revenues of $200,000 might list for $127,781. Keep in mind that this is just an average for revenue multiples in the area. Some entities 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 $358,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.76 and the median revenue for listed businesses was $360,000.
Q1 2009 Cash Flow Multiples In San Diego, 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 San Diego-Carlsbad-San Marcos, CA metro area was 2.69.
So, a business with cash flows of $150,000 might have an asking price of $403,797. 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 Diego, BizBuySell.com determined that the median cash flow for San Diego area businesses was $85,000 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.08 and the median cash flow was $84,000.
Tips for San Diego, CA Business Sellers
A diversified customer base is a great selling point to buyers. If you are preparing to sell a business and your customer base is not diversified, think about how you can diversify your customer base and thereby lower the risks for a buyer. By doing so, you can sell a business for a higher price. Ideally, no single customer should account for more than 10% of your revenues. This advice comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for San Diego, CA 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 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 San Diego, 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 San Diego-Carlsbad-San Marcos, CA metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the San Diego area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the San Diego area, based on BizBuySell.com's quarterly reports.
Flow Multiple
Share this article
Additional Resources for Entrepreneurs