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

 

 

Sell My Phoenix, AZ Business

We just received the latest Phoenix, Arizona business valuation data for Third Quarter 2009.

Median Ask Prices for Phoenix, AZ Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Phoenix-Mesa-Scottsdale, AZ metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$200,000

Q2 2007

$195,000

Q3 2007

$225,000

Q4 2007

$219,000

Q1 2008

$220,000

Q2 2008

$225,000

Q3 2008

$210,000

Q4 2008

$200,000

Q1 2009

$210,000

Q2 2009

$190,000

Q3 2009

$190,000

As shown in the table, Phoenix business-for-sale listings in Q3 2009 had a median asking price of $190,000.

That compares to a median ask price of $210,000 in Q3 2008. Given that Phoenix, AZ median business asking prices appear to be dropping, it suggests that selling Phoenix businesses may be lowering their prices to make their businesses more attractive to buyers.

Revenue Multiples for Phoenix, AZ Businesses

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

Quarter

Revenue Multiple

Q1 2007

0.88

Q2 2007

0.84

Q3 2007

0.92

Q4 2007

0.90

Q1 2008

0.88

Q2 2008

0.88

Q3 2008

0.91

Q4 2008

0.88

Q1 2009

0.89

Q2 2009

0.84

Q3 2009

0.85

In the Phoenix-Mesa-Scottsdale, AZ metro area, companies will typically sell for 0.85 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 $127,775. Keep in mind that this is just 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 Phoenix business-for-sale listings was $300,000 in Q3 2009.

As a reference point, the Q3 2008 revenue multiple was 0.91 and the median revenue for listed Phoenix businesses was $332,897.

Cash Flow Multiples for Phoenix, AZ Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

3.20

Q2 2007

3.10

Q3 2007

3.30

Q4 2007

3.21

Q1 2008

3.27

Q2 2008

3.26

Q3 2008

3.26

Q4 2008

3.19

Q1 2009

3.27

Q2 2009

3.10

Q3 2009

3.11

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 Phoenix-Mesa-Scottsdale, AZ metro area was 3.11.

So, a business with cash flows of $110,000 might list for $341,598. 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 Phoenix, BizBuySell.com reports that the median cash flow for Phoenix area businesses was $75,000 in Q3 2009. In Q3 2008, Phoenix cash flow multiples averaged 3.26 and the median cash flow was $82,425.

Number of Phoenix Businesses for Sale in the Dataset

The study data comprised 1181 listings in the Phoenix-Mesa-Scottsdale, AZ metro area. As such, some of the businesses used to derive the median valuation might be outside of Phoenix, but they are in the area and so are probably representative of Phoenix business valuations.

In Q3 2008, just one year ago, there were 1517 Phoenix listings in the BizBuySell.com dataset. As a result of the recession, fewer Phoenix business owners are selling because they hope to weather the storm and sell after the economy turns around.

Can I Sell My Phoenix, AZ Business Now?

While the economy can play a role in deciding whether to sell a business or not, it is only one of many factors. Indications suggest that the economy is turning around, so it's probaby a good time to consider selling right now. Beyond that, though, you have to look at your specific case. Will there be substantial demand for your business? Will you be able to get a good price when selling your company? If not, think about what factors you can control that can make your business more attractive to prospective buyers, and then work diligently to improve your business attractiveness and raise your business valuation. This helpful advice was provided by Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Phoenix, AZ Businesses

If you are thinking about 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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