Q1 2009 Costs to Buy a Business

How Much Is My Vancouver Business Worth?

BizBuySell.com has just released its Vancouver, Washington business valuation data for First Quarter 2009.

Vancouver, WA Q1 2009 Business Valuations

According to statistics issued by BizBuySell.com, Vancouver business-for-sale listings in Q1 2009 had a median asking price of $295,000.

That compares to a median ask price of $290,000 in Q1 2008. With median asking prices for Vancouver, WA 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 Vancouver company for much less. However, some Vancouver businesses may be selling for much more.

Also, this is the asking price for a Vancouver business. When a business 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 depends on deal specifics. That means a company listed for $200,000 might be sold for between $170,000 and $180,000.

Number of Vancouver Businesses for Sale in the Dataset

The study data comprised 170 listings in the Portland-Vancouver-Beaverton, OR-WA metro area. As such, some of the businesses used to derive the median valuation might be outside of Vancouver, but they are nearby and so are probably representative of Vancouver business valuations.

One year ago, in Q1 2008, the BizBuySell.com dataset for Vancouver spanned 162 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Vancouver business-for-sale listings.

Q1 2009 Revenue Multiples In Vancouver, WA

In the Portland-Vancouver-Beaverton, OR-WA metro area, businesses will typically sell for 0.86 times the selling company's revenues. That 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 $172,804. Remember, however, that this is simply 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 $400,672 in Q1 2009.

To put this in perspective, the Q1 2008 revenue multiple was 0.82 and the median revenue for listed businesses was $469,000.

Q1 2009 Cash Flow Multiples In Vancouver, WA

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

For Q1 2009, the average cash flow multiple for listed businesses in the Portland-Vancouver-Beaverton, OR-WA metro area was 3.41.

So, a business with cash flows of $150,000 might have an asking price of $511,244. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.

If you are interested in what cash flows are for a business in Vancouver, BizBuySell.com reports that the median cash flow for Vancouver area businesses was $102,237 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.65 and the median cash flow was $95,631.

Things to Consider When Selling a Business in Vancouver, WA

Competitors tend to pay less for a business than strategic buyers. In most cases, selling out to a competitor should be your exit strategy of last resort (although selling to an employee may get an even lower exit price). This good advice comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.

Business Valuations for Vancouver, WA Businesses

If you are contemplating buying a business or selling a business and would like to value a specific business, 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 Vancouver, WA 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 Portland-Vancouver-Beaverton, OR-WA metro area for the last 9 quarters.

Quarter
Median Ask
Q1 2007
$189,500
Q2 2007
$202,500
Q3 2007
$299,000
Q4 2007
$315,000
Q1 2008
$290,000
Q2 2008
$275,000
Q3 2008
$275,000
Q4 2008
$289,500
Q1 2009
$295,000

Here is how median revenue multiples are trending in the Vancouver area, based on BizBuySell.com's data.

Quarter
Revenue Multiple
Q1 2007
0.68
Q2 2007
0.76
Q3 2007
0.88
Q4 2007
0.83
Q1 2008
0.82
Q2 2008
0.92
Q3 2008
0.96
Q4 2008
0.83
Q1 2009
0.86

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

Quarter
Median Cash
Flow Multiple
Q1 2007
3.30
Q2 2007
3.42
Q3 2007
3.74
Q4 2007
3.91
Q1 2008
3.65
Q2 2008
3.99
Q3 2008
3.84
Q4 2008
3.47
Q1 2009
3.41

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