September 26, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Chicago, IL Business

BizBuySell.com has just released its Chicago, Illinois business valuation data for Third Quarter 2009.

Median Ask Prices for Chicago, IL Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Chicago-Naperville-Joliet, IL-IN-WI metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$250,000

Q2 2007

$285,000

Q3 2007

$275,000

Q4 2007

$250,000

Q1 2008

$260,000

Q2 2008

$280,000

Q3 2008

$292,000

Q4 2008

$275,000

Q1 2009

$275,000

Q2 2009

$272,500

Q3 2009

$250,000

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

That compares to a median ask price of $292,000 in Q3 2008. Given that Chicago, IL median business asking prices appear to be dropping, it suggests that selling Chicago businesses may be lowering their prices to make their businesses more attractive to buyers.

Revenue Multiples for Chicago, IL Businesses

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

Quarter

Revenue Multiple

Q1 2007

1.26

Q2 2007

1.19

Q3 2007

0.90

Q4 2007

0.82

Q1 2008

0.85

Q2 2008

0.84

Q3 2008

0.86

Q4 2008

0.80

Q1 2009

0.82

Q2 2009

0.86

Q3 2009

0.82

In the Chicago-Naperville-Joliet, IL-IN-WI metro area, small companies will typically sell for 0.82 times the selling company's revenues. As the table above indicates, this was the mean revenue multiple for Q3 2009 in this part of the country.

In other words, a firm with revenues of $150,000 might list for $122,348. Remember, however, that this is strictly 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 Chicago business-for-sale listings was $449,865 in Q3 2009.

To put this in perspective, the Q3 2008 revenue multiple was 0.86 and the median revenue for listed Chicago businesses was $430,000.

Cash Flow Multiples for Chicago, IL Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

4.33

Q2 2007

3.94

Q3 2007

3.65

Q4 2007

3.44

Q1 2008

3.38

Q2 2008

3.32

Q3 2008

3.42

Q4 2008

3.23

Q1 2009

3.28

Q2 2009

3.42

Q3 2009

3.41

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 Chicago-Naperville-Joliet, IL-IN-WI metro area was 3.41.

So, a firm with cash flows of $110,000 might list for $375,595. That's only if the firm complies with the local average. Cash flow multiples will usually vary considerably based on many factors.

If you are interested in what cash flows are for a business in Chicago, BizBuySell.com determined that the median cash flow for Chicago area businesses was $92,694 in Q3 2009. In Q3 2008, Chicago cash flow multiples averaged 3.42 and the median cash flow was $101,344.

Number of Chicago Businesses for Sale in the Dataset

The study data comprised 535 listings in the Chicago-Naperville-Joliet, IL-IN-WI metro area. Many of the businesses in the dataset are outside of Chicago, but they are close by and so are probably representative of Chicago business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Chicago spanned 651 listings. The downward trend in the number of Chicago business-for-sale listings is indicative of the current down economy.

Can I Sell My Chicago, IL Business Now?

If you are trying to decide if this is a good time to sell a business, hire a third-party business appraisal firm to determine a business valuation for the company. This exercise should give you much better insights on whether it's a good time to sell or not. A consultation with a qualified business broker will also be very helpful to you. This useful business selling advice comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Chicago, IL Businesses

If you are considering buying a business or selling a business and would like to get an estimated company valuation, 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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