September 29, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Long Beach, CA Business

We just received the latest Long Beach, California business-for-sale statistics.

Median Ask Prices for Long Beach, CA 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 Los Angeles-Long Beach-Santa Ana, CA metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$215,000

Q2 2007

$225,000

Q3 2007

$225,000

Q4 2007

$225,000

Q1 2008

$225,000

Q2 2008

$225,000

Q3 2008

$229,999

Q4 2008

$238,000

Q1 2009

$230,000

Q2 2009

$235,000

Q3 2009

$235,000

As shown in the table, Long Beach business-for-sale listings in Q3 2009 had a median asking price of $235,000.

That compares to a median ask price of $229,999 in Q3 2008. Since the median ask price for businesses for sale in Long Beach has gone up year over year, we can conclude that many smaller businesses in Long Beach are putting off selling.

Revenue Multiples for Long Beach, CA Businesses

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

Quarter

Revenue Multiple

Q1 2007

0.83

Q2 2007

0.84

Q3 2007

0.85

Q4 2007

0.83

Q1 2008

0.83

Q2 2008

0.85

Q3 2008

0.83

Q4 2008

0.79

Q1 2009

0.79

Q2 2009

0.80

Q3 2009

0.78

In the Los Angeles-Long Beach-Santa Ana, CA metro area, small companies will usually sell for 0.78 times the selling company's revenues. As the table above indicates, this 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 $116,781. Remember, however, that this is just 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 Long Beach business-for-sale listings was $380,000 in Q3 2009.

To put this in perspective, the Q3 2008 revenue multiple was 0.83 and the median revenue for listed Long Beach businesses was $360,000.

Cash Flow Multiples for Long Beach, CA Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

3.01

Q2 2007

3.03

Q3 2007

3.00

Q4 2007

3.00

Q1 2008

3.01

Q2 2008

3.06

Q3 2008

3.02

Q4 2008

3.01

Q1 2009

2.97

Q2 2009

2.99

Q3 2009

2.99

As you probably know, cash flow multiples are another common way to value a business.

For Q3 2009, the average cash flow multiple for businesses listed in the Los Angeles-Long Beach-Santa Ana, CA metro area was 2.99.

So, a business with cash flows of $110,000 might list for $329,319. 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 Long Beach, BizBuySell.com found that the median cash flow for Long Beach area businesses was $95,000 in Q3 2009. In Q3 2008, Long Beach cash flow multiples averaged 3.02 and the median cash flow was $92,166.

Number of Long Beach Businesses for Sale in the Dataset

The study data comprised 3439 listings in the Los Angeles-Long Beach-Santa Ana, CA metro area. Many of the businesses in the dataset are outside of Long Beach, but they are in the area and so are probably representative of Long Beach business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Long Beach spanned 4359 listings. The downward trend in the number of Long Beach business-for-sale listings is indicative of the current down economy.

Can I Sell My Long Beach, CA 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 Long Beach, CA Businesses

If you are contemplating 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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