September 25, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Dallas, TX Business

We just received the latest Dallas, Texas statistics on business valuations for Third Quarter 2009.

Median Ask Prices for Dallas, TX Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Dallas-Fort Worth-Arlington, TX metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$330,000

Q2 2007

$300,000

Q3 2007

$330,000

Q4 2007

$330,000

Q1 2008

$300,000

Q2 2008

$291,000

Q3 2008

$275,000

Q4 2008

$290,000

Q1 2009

$285,000

Q2 2009

$290,000

Q3 2009

$299,500

As you can see from the chart above, Dallas business-for-sale listings in Q3 2009 had a median asking price of $299,500.

That compares to a median ask price of $275,000 in Q3 2008. Because the median ask price for businesses for sale in Dallas has risen year over year, we can conclude that many smaller firms in Dallas are holding off on selling.

Revenue Multiples for Dallas, TX Businesses

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

Quarter

Revenue Multiple

Q1 2007

1.04

Q2 2007

1.04

Q3 2007

1.03

Q4 2007

1.00

Q1 2008

1.04

Q2 2008

1.00

Q3 2008

0.95

Q4 2008

0.96

Q1 2009

1.01

Q2 2009

1.04

Q3 2009

1.06

In the Dallas-Fort Worth-Arlington, TX metro area, companies will usually sell for 1.06 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 business that has revenues of $150,000 might list for $159,193. Remember, however, 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 Dallas business-for-sale listings was $431,000 in Q3 2009.

As a reference point, the Q3 2008 revenue multiple was 0.95 and the median revenue for listed Dallas businesses was $439,000.

Cash Flow Multiples for Dallas, TX Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

3.71

Q2 2007

3.69

Q3 2007

3.73

Q4 2007

3.69

Q1 2008

3.81

Q2 2008

3.69

Q3 2008

3.54

Q4 2008

3.53

Q1 2009

3.69

Q2 2009

3.69

Q3 2009

3.74

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 Dallas-Fort Worth-Arlington, TX metro area was 3.74.

So, a firm with cash flows of $110,000 might list for $411,277. 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 Dallas, BizBuySell.com reports that the median cash flow for Dallas area businesses was $120,000 in Q3 2009. In Q3 2008, Dallas cash flow multiples averaged 3.54 and the median cash flow was $105,000.

Number of Dallas Businesses for Sale in the Dataset

The study data comprised 928 listings in the Dallas-Fort Worth-Arlington, TX metro area. As such, some of the businesses used to derive the median valuation might be outside of Dallas, but they are in the area and so are likely representative of Dallas business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Dallas spanned 1085 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Dallas business-for-sale listings.

Can I Sell My Dallas, TX 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 Dallas, TX Businesses

If you are thinking about 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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