September 28, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Birmingham, AL Business

We just received the latest Birmingham, Alabama business valuation data for Third Quarter 2009.

Median Ask Prices for Birmingham, AL Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Birmingham-Hoover, AL metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$296,000

Q2 2007

$200,000

Q3 2007

$217,500

Q4 2007

$245,000

Q1 2008

$225,000

Q2 2008

$232,500

Q3 2008

$262,500

Q4 2008

$332,000

Q1 2009

$277,500

Q2 2009

$250,000

Q3 2009

$250,000

As you can see from the chart above, Birmingham business-for-sale listings in Q3 2009 had a median asking price of $250,000.

That compares to a median ask price of $262,500 in Q3 2008. The lower median asking price in last quarter suggests that Birmingham, AL sellers are dropping their asking prices in light of market conditions. This is making it possible for more business-for-sale transactions to close.

Revenue Multiples for Birmingham, AL Businesses

Here is how median revenue multiples are trending in the Birmingham area, based on BizBuySell.com's quarterly reports.

Quarter

Revenue Multiple

Q1 2007

0.68

Q2 2007

0.76

Q3 2007

0.76

Q4 2007

0.95

Q1 2008

0.89

Q2 2008

0.85

Q3 2008

0.88

Q4 2008

0.89

Q1 2009

0.89

Q2 2009

1.04

Q3 2009

1.10

In the Birmingham-Hoover, AL metro area, small companies will usually sell for 1.10 times the selling company's revenues. As shown in the chart above, that was the mean revenue multiple for Q3 2009 in this area of the country.

In other words, a business that has revenues of $150,000 might list for $165,553. Keep in mind that this is strictly 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 Birmingham business-for-sale listings was $380,000 in Q3 2009.

To put this in perspective, the Q3 2008 revenue multiple was 0.88 and the median revenue for listed Birmingham businesses was $442,500.

Cash Flow Multiples for Birmingham, AL Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

3.12

Q2 2007

3.51

Q3 2007

3.43

Q4 2007

3.89

Q1 2008

3.62

Q2 2008

3.71

Q3 2008

3.65

Q4 2008

3.75

Q1 2009

3.66

Q2 2009

3.91

Q3 2009

4.01

As you probably know, cash flow multiples are another common way to value a business.

For Q3 2009, the average cash flow multiple for listed businesses in the Birmingham-Hoover, AL metro area was 4.01.

So, a company with cash flows of $110,000 might list for $441,362. 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 Birmingham, BizBuySell.com found that the median cash flow for Birmingham area businesses was $97,000 in Q3 2009. In Q3 2008, Birmingham cash flow multiples averaged 3.65 and the median cash flow was $91,988.

Number of Birmingham Businesses for Sale in the Dataset

The study data comprised 59 listings in the Birmingham-Hoover, AL metro area. Many of the businesses in the dataset are outside of Birmingham, but they are close by and so are likely representative of Birmingham business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Birmingham spanned 92 listings. The downward trend in the number of Birmingham business-for-sale listings is indicative of the current down economy.

Can I Sell My Birmingham, AL Business Now?

While some business owners are waiting to sell until the market turns around, this can be a mistake. When the market turns around, many businesses will rush to list themselves for sale and this could lead to lower sale prices because of the basic laws of supply and demand. For this reason, it might make sense to act counterintuitively to common wisdom on when it's the right time to sell a business. This good advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Birmingham, AL Businesses

If you are thinking about buying a business or selling a business and would like to determine how much a business is worth, we recommend the BizBuySell.com Business Valuation Tool. Based on your specific criteria, you can modify the company dataset that creates business valuation estimates. Access to the tool is very reasonable -- costing less than $100.

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.

 

 

 

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