September 18, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Cincinnati, OH Business

We just received the latest Cincinnati, Ohio small business valuation trend data for Third Quarter 2009.

Median Ask Prices for Cincinnati, OH Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Cincinnati-Middletown, OH-KY-IN metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$277,000

Q2 2007

$200,000

Q3 2007

$204,500

Q4 2007

$200,000

Q1 2008

$225,000

Q2 2008

$237,000

Q3 2008

$249,500

Q4 2008

$210,000

Q1 2009

$272,000

Q2 2009

$254,950

Q3 2009

$275,000

As you can see from the chart above, Cincinnati business-for-sale listings in Q3 2009 had a median asking price of $275,000.

That compares to a median ask price of $249,500 in Q3 2008. Since the median ask price for businesses for sale in Cincinnati has gone up year over year, we can conclude that many smaller businesses in Cincinnati are putting off selling.

Revenue Multiples for Cincinnati, OH Businesses

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

Quarter

Revenue Multiple

Q1 2007

0.71

Q2 2007

0.90

Q3 2007

0.92

Q4 2007

0.93

Q1 2008

0.75

Q2 2008

0.76

Q3 2008

0.74

Q4 2008

0.71

Q1 2009

0.81

Q2 2009

0.73

Q3 2009

0.78

In the Cincinnati-Middletown, OH-KY-IN metro area, small companies will usually sell for 0.78 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 $116,495. 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 Cincinnati business-for-sale listings was $477,000 in Q3 2009.

To put this in perspective, the Q3 2008 revenue multiple was 0.74 and the median revenue for listed Cincinnati businesses was $427,500.

Cash Flow Multiples for Cincinnati, OH Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

3.59

Q2 2007

3.66

Q3 2007

3.68

Q4 2007

3.96

Q1 2008

3.70

Q2 2008

3.80

Q3 2008

3.76

Q4 2008

3.81

Q1 2009

4.18

Q2 2009

3.89

Q3 2009

3.87

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 Cincinnati-Middletown, OH-KY-IN metro area was 3.87.

So, a business with cash flows of $110,000 might list for $425,437. That calculation is dependent on the business selling for the area's average multiple. Most businesses will not conform to industry- or area averages.

If you are interested in what cash flows are for a business in Cincinnati, BizBuySell.com found that the median cash flow for Cincinnati area businesses was $93,000 in Q3 2009. In Q3 2008, Cincinnati cash flow multiples averaged 3.76 and the median cash flow was $80,000.

Number of Cincinnati Businesses for Sale in the Dataset

The study data comprised 105 listings in the Cincinnati-Middletown, OH-KY-IN metro area. As such, some of the businesses used to derive the median valuation might be outside of Cincinnati, but they are close by and so are probably representative of Cincinnati business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Cincinnati spanned 118 listings. The downward trend in the number of Cincinnati business-for-sale listings is indicative of the current down economy.

Can I Sell My Cincinnati, OH Business Now?

You can absolutely sell in this market. Deals are getting done every day. You just have to structure the deal properly. In this down economy, performance based pricing is very popular. When buyers and sellers differ on valuations, tools such as earnouts, equity ownership or profit sharing can bridge the valuation gap. In effect, this is a deferred purchase price, but it's a way to get a deal done in a tough economic climate. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Cincinnati, OH Businesses

If you are considering 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 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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