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

 

 

Sell My Cambridge, MA Business

We just received the latest Cambridge, Massachusetts business valuation data for Third Quarter 2009.

Median Ask Prices for Cambridge, MA Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Boston-Cambridge-Quincy, MA-NH metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$199,900

Q2 2007

$189,000

Q3 2007

$217,250

Q4 2007

$219,000

Q1 2008

$212,500

Q2 2008

$200,000

Q3 2008

$199,000

Q4 2008

$199,000

Q1 2009

$199,000

Q2 2009

$199,000

Q3 2009

$199,900

As shown in the table, Cambridge business-for-sale listings in Q3 2009 had a median asking price of $199,900.

That compares to a median ask price of $199,000 in Q3 2008. With median asking prices for Cambridge, MA 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.

Revenue Multiples for Cambridge, MA Businesses

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

Quarter

Revenue Multiple

Q1 2007

0.81

Q2 2007

0.77

Q3 2007

0.83

Q4 2007

0.82

Q1 2008

0.84

Q2 2008

0.81

Q3 2008

0.82

Q4 2008

0.80

Q1 2009

0.79

Q2 2009

0.79

Q3 2009

0.75

In the Boston-Cambridge-Quincy, MA-NH metro area, businesses will typically sell for 0.75 times the selling company's revenues. As the table above indicates, this was the mean revenue multiple for Q3 2009 in this metro area.

In other words, a firm with revenues of $150,000 might list for $112,018. Remember, however, 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 Cambridge business-for-sale listings was $392,500 in Q3 2009.

To put this in perspective, the Q3 2008 revenue multiple was 0.82 and the median revenue for listed Cambridge businesses was $355,000.

Cash Flow Multiples for Cambridge, MA Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

2.85

Q2 2007

2.74

Q3 2007

2.80

Q4 2007

2.86

Q1 2008

2.97

Q2 2008

2.92

Q3 2008

2.95

Q4 2008

2.95

Q1 2009

2.99

Q2 2009

2.87

Q3 2009

2.82

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 Boston-Cambridge-Quincy, MA-NH metro area was 2.82.

So, a firm with cash flows of $110,000 might list for $310,412. That's only if the firm complies with the local average. In practice, cash flow multiples can vary considerably from one business type to another.

In case you were wondering what typical cash flows are for a business in Cambridge, BizBuySell.com reports that the median cash flow for Cambridge area businesses was $100,000 in Q3 2009. In Q3 2008, Cambridge cash flow multiples averaged 2.95 and the median cash flow was $98,102.

Number of Cambridge Businesses for Sale in the Dataset

The study data comprised 536 listings in the Boston-Cambridge-Quincy, MA-NH metro area. As such, some of the businesses used to derive the median valuation might be outside of Cambridge, but they are in the area and so are probably representative of Cambridge business valuations.

In Q3 2008, just one year ago, there were 659 Cambridge listings in the BizBuySell.com dataset. As a result of the recession, fewer Cambridge business owners are selling because they hope to weather the storm and sell after the economy turns around.

Can I Sell My Cambridge, MA Business Now?

The decision to sell now or wait until later should be based on your own personal circumstances and your business's circumstances. A short consultation with a business broker can help you determine whether now is the right time to sell. This useful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Cambridge, MA Businesses

If you are contemplating buying a business or selling a business and would like to look at completed transaction sale price comparables in the area, 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 published quarterly. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.

 

 

 

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