September 25, 2020  
 
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Q3 2009 Business Valuation Data

 

 

Sell My Denver, CO Business

BizBuySell.com has just released its Denver, Colorado business valuation data for Third Quarter 2009.

Median Ask Prices for Denver, CO Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses for sale in the Denver-Aurora, CO metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$285,000

Q2 2007

$241,950

Q3 2007

$228,375

Q4 2007

$250,000

Q1 2008

$250,000

Q2 2008

$250,000

Q3 2008

$250,000

Q4 2008

$250,000

Q1 2009

$250,000

Q2 2009

$262,500

Q3 2009

$247,000

As you can see from the chart above, Denver business-for-sale listings in Q3 2009 had a median asking price of $247,000.

That compares to a median ask price of $250,000 in Q3 2008. Given that Denver, CO median business asking prices appear to be dropping, it suggests that selling Denver businesses may be lowering their prices to make their businesses more attractive to buyers.

Revenue Multiples for Denver, CO Businesses

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

Quarter

Revenue Multiple

Q1 2007

0.68

Q2 2007

0.65

Q3 2007

0.66

Q4 2007

0.68

Q1 2008

0.88

Q2 2008

0.85

Q3 2008

0.82

Q4 2008

0.79

Q1 2009

0.79

Q2 2009

0.74

Q3 2009

0.72

In the Denver-Aurora, CO metro area, small companies will usually sell for 0.72 times the selling company's revenues. The data from BizBuySell.com indicates that is 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 $107,852. Remember, however, that this is just an average for revenue multiples in the area. Some businesses will have higher revenue multiples and others will have lower revenue multiples.

According to BizBuySell.com, the median revenues for its Denver business-for-sale listings was $432,036 in Q3 2009.

As a reference point, the Q3 2008 revenue multiple was 0.82 and the median revenue for listed Denver businesses was $415,224.

Cash Flow Multiples for Denver, CO Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

2.99

Q2 2007

2.90

Q3 2007

3.00

Q4 2007

3.09

Q1 2008

3.29

Q2 2008

3.22

Q3 2008

3.14

Q4 2008

3.17

Q1 2009

3.18

Q2 2009

3.19

Q3 2009

3.13

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 Denver-Aurora, CO metro area was 3.13.

So, a business with cash flows of $110,000 might list for $343,998. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.

In case you were wondering what typical cash flows are for a business in Denver, BizBuySell.com reports that the median cash flow for Denver area businesses was $92,550 in Q3 2009. In Q3 2008, Denver cash flow multiples averaged 3.14 and the median cash flow was $92,100.

Number of Denver Businesses for Sale in the Dataset

The study data comprised 330 listings in the Denver-Aurora, CO metro area. As such, some of the businesses used to derive the median valuation might be outside of Denver, but they are in the area and so are likely representative of Denver business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Denver spanned 391 listings. The downward trend in the number of Denver business-for-sale listings is indicative of the current down economy.

Should I Sell My Denver, CO 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 Denver, CO 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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