September 27, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Houston, TX Business

We just received the latest Houston, Texas business valuation data for Third Quarter 2009.

Median Ask Prices for Houston, TX Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Houston-Sugar Land-Baytown, TX metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$250,000

Q2 2007

$245,000

Q3 2007

$225,000

Q4 2007

$225,000

Q1 2008

$221,500

Q2 2008

$250,000

Q3 2008

$250,000

Q4 2008

$285,000

Q1 2009

$295,000

Q2 2009

$295,000

Q3 2009

$275,000

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

That compares to a median ask price of $250,000 in Q3 2008. Because the median ask price for businesses for sale in Houston has risen year over year, we can conclude that many smaller firms in Houston are holding off on selling.

Revenue Multiples for Houston, TX Businesses

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

Quarter

Revenue Multiple

Q1 2007

1.25

Q2 2007

1.22

Q3 2007

1.15

Q4 2007

1.10

Q1 2008

1.07

Q2 2008

1.08

Q3 2008

1.04

Q4 2008

1.07

Q1 2009

1.07

Q2 2009

1.06

Q3 2009

0.96

In the Houston-Sugar Land-Baytown, TX metro area, small companies will typically sell for 0.96 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 firm with revenues of $150,000 might list for $144,645. Remember, however, that this is simply 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 Houston business-for-sale listings was $420,000 in Q3 2009.

To give this some context, the Q3 2008 revenue multiple was 1.04 and the median revenue for listed Houston businesses was $360,000.

Cash Flow Multiples for Houston, TX Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

3.88

Q2 2007

3.52

Q3 2007

3.59

Q4 2007

3.59

Q1 2008

3.56

Q2 2008

3.66

Q3 2008

3.61

Q4 2008

3.70

Q1 2009

3.65

Q2 2009

3.65

Q3 2009

3.49

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 Houston-Sugar Land-Baytown, TX metro area was 3.49.

So, a business with cash flows of $110,000 might list for $384,406. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.

If you are interested in what cash flows are for a business in Houston, BizBuySell.com reports that the median cash flow for Houston area businesses was $105,000 in Q3 2009. In Q3 2008, Houston cash flow multiples averaged 3.61 and the median cash flow was $96,640.

Number of Houston Businesses for Sale in the Dataset

The study data comprised 483 listings in the Houston-Sugar Land-Baytown, TX metro area. As such, some of the businesses used to derive the median valuation might be outside of Houston, but they are close by and so are probably representative of Houston business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Houston spanned 577 listings. The downward trend in the number of Houston business-for-sale listings is indicative of the current down economy.

Can I Sell My Houston, TX Business Now?

It can take a long time to get a business ready to sell. The sooner you start the process, the sooner you'll be in good shape to entertain offers from would-be business buyers. This helpful advice on how to buy a business comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Houston, TX 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 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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