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

 

 

Sell My Norfolk, VA Business

We just received the latest Norfolk, Virginia business valuation data for Third Quarter 2009.

Median Ask Prices for Norfolk, VA Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Virginia Beach-Norfolk-Newport News, VA-NC metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$275,000

Q2 2007

$250,000

Q3 2007

$255,000

Q4 2007

$247,500

Q1 2008

$225,000

Q2 2008

$229,500

Q3 2008

$239,250

Q4 2008

$258,750

Q1 2009

$280,000

Q2 2009

$250,000

Q3 2009

$227,000

As you can see from the chart above, Norfolk business-for-sale listings in Q3 2009 had a median asking price of $227,000.

That compares to a median ask price of $239,250 in Q3 2008. Given that Norfolk, VA median business asking prices appear to be dropping, it suggests that selling Norfolk businesses may be lowering their prices to make their businesses more attractive to buyers.

Revenue Multiples for Norfolk, VA Businesses

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

Quarter

Revenue Multiple

Q1 2007

0.78

Q2 2007

0.78

Q3 2007

0.88

Q4 2007

0.79

Q1 2008

0.74

Q2 2008

0.74

Q3 2008

0.75

Q4 2008

0.76

Q1 2009

0.77

Q2 2009

0.79

Q3 2009

0.78

In the Virginia Beach-Norfolk-Newport News, VA-NC metro area, small companies will typically 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 metro area.

In other words, a business that has revenues of $150,000 might list for $116,460. Remember, however, that this is just an average for revenue multiples in Norfolk and surrounding communities. Some companies will have higher revenue multiples and others will have lower revenue multiples.

According to BizBuySell.com, the median revenues for its Norfolk business-for-sale listings was $377,500 in Q3 2009.

To give this some context, the Q3 2008 revenue multiple was 0.75 and the median revenue for listed Norfolk businesses was $392,500.

Cash Flow Multiples for Norfolk, VA Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

3.46

Q2 2007

3.44

Q3 2007

3.51

Q4 2007

3.30

Q1 2008

3.23

Q2 2008

3.15

Q3 2008

3.07

Q4 2008

3.20

Q1 2009

3.33

Q2 2009

3.42

Q3 2009

3.66

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 Virginia Beach-Norfolk-Newport News, VA-NC metro area was 3.66.

So, a company with cash flows of $110,000 might list for $402,179. That calculation is dependent on the business selling for the area's average multiple. Most businesses will not conform to industry- or area averages.

In case you were wondering what typical cash flows are for a business in Norfolk, BizBuySell.com determined that the median cash flow for Norfolk area businesses was $83,456 in Q3 2009. In Q3 2008, Norfolk cash flow multiples averaged 3.07 and the median cash flow was $90,554.

Number of Norfolk Businesses for Sale in the Dataset

The study data comprised 206 listings in the Virginia Beach-Norfolk-Newport News, VA-NC metro area. As such, some of the businesses used to derive the median valuation might be outside of Norfolk, but they are in the area and so are probably representative of Norfolk business valuations.

In Q3 2008, just one year ago, there were 228 Norfolk listings in the BizBuySell.com dataset. As a result of the recession, fewer Norfolk business owners are selling because they hope to weather the storm and sell after the economy turns around.

Can I Sell My Norfolk, VA Business Now?

Selling a business now is the right decision for many business owners. That's because it's a great time to sell given the sheer number of buyers in the marketplace right now. Laid-off executives, for example, our turning to entrepreneurship and are actively exploring business-for-sale opportunities. If your business has solid fundamentals and you have a good plan, your next step should be to talk to a professional intermediary who can help you to package up the business for sale and get maximize your business sale price. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Norfolk, VA 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 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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