September 28, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Memphis, TN Business

Every quarter, BizBuySell.com publishes business valuation data, and we now have their latest Memphis, Tennessee business valuation data for Third Quarter 2009.

Median Ask Prices for Memphis, TN Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Memphis, TN-MS-AR metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$275,000

Q2 2007

$349,000

Q3 2007

$298,000

Q4 2007

$260,000

Q1 2008

$250,000

Q2 2008

$275,000

Q3 2008

$260,000

Q4 2008

$240,000

Q1 2009

$250,000

Q2 2009

$208,000

Q3 2009

$180,000

As you can see from the chart above, Memphis business-for-sale listings in Q3 2009 had a median asking price of $180,000.

That compares to a median ask price of $260,000 in Q3 2008. Given that Memphis, TN median business asking prices appear to be dropping, it suggests that selling Memphis businesses may be lowering their prices to make their businesses more attractive to buyers.

Revenue Multiples for Memphis, TN Businesses

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

Quarter

Revenue Multiple

Q1 2007

1.25

Q2 2007

0.96

Q3 2007

1.00

Q4 2007

1.04

Q1 2008

0.99

Q2 2008

0.79

Q3 2008

0.85

Q4 2008

0.86

Q1 2009

0.89

Q2 2009

0.84

Q3 2009

0.74

In the Memphis, TN-MS-AR metro area, small companies will typically sell for 0.74 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 $110,259. Remember, however, that this is just an average for revenue multiples in the area. Some companies will have higher revenue multiples and others will have lower revenue multiples.

According to BizBuySell.com, the median revenues for its Memphis business-for-sale listings was $368,400 in Q3 2009.

To put this in perspective, the Q3 2008 revenue multiple was 0.85 and the median revenue for listed Memphis businesses was $384,000.

Cash Flow Multiples for Memphis, TN Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

4.30

Q2 2007

3.89

Q3 2007

3.86

Q4 2007

3.89

Q1 2008

3.76

Q2 2008

3.38

Q3 2008

3.32

Q4 2008

3.15

Q1 2009

3.31

Q2 2009

3.64

Q3 2009

3.34

As you probably know, cash flow multiples are another popular technique to value a business.

For Q3 2009, the average cash flow multiple for businesses listed in the Memphis, TN-MS-AR metro area was 3.34.

So, a company with cash flows of $110,000 might list for $367,094. That calculation is dependent on the business selling for the area's average multiple. The actual distribution on cash flow multiples for a given set of businesses can be quite wide-ranging.

If you are interested in what cash flows are for a business in Memphis, BizBuySell.com reports that the median cash flow for Memphis area businesses was $60,000 in Q3 2009. In Q3 2008, Memphis cash flow multiples averaged 3.32 and the median cash flow was $117,343.

Number of Memphis Businesses for Sale in the Dataset

The study data comprised 55 listings in the Memphis, TN-MS-AR metro area. Many of the businesses in the dataset are outside of Memphis, but they are close by and so are likely representative of Memphis business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Memphis spanned 57 listings. The downward trend in the number of Memphis business-for-sale listings is indicative of the current down economy.

Can I Sell My Memphis, TN Business Now?

The decision to sell now or wait until later should be based on your own personal circumstances and your business's circumstances. A short consultation with a business broker can help you determine whether now is the right time to sell. This useful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Memphis, TN Businesses

If you are contemplating buying a business or selling a business and would like to determine how much a business is worth, 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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