September 22, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Providence, RI Business

We just received the latest Providence, Rhode Island business valuation data for Third Quarter 2009.

Median Ask Prices for Providence, RI Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Providence-New Bedford-Fall River, RI-MA metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$185,000

Q2 2007

$200,000

Q3 2007

$195,000

Q4 2007

$195,000

Q1 2008

$165,000

Q2 2008

$185,000

Q3 2008

$160,000

Q4 2008

$165,000

Q1 2009

$179,000

Q2 2009

$160,000

Q3 2009

$162,500

As shown in the table, Providence business-for-sale listings in Q3 2009 had a median asking price of $162,500.

That compares to a median ask price of $160,000 in Q3 2008. Because the median ask price for businesses for sale in Providence has risen year over year, we can conclude that many smaller firms in Providence are holding off on selling.

Revenue Multiples for Providence, RI Businesses

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

Quarter

Revenue Multiple

Q1 2007

0.77

Q2 2007

0.79

Q3 2007

0.77

Q4 2007

0.81

Q1 2008

0.80

Q2 2008

0.76

Q3 2008

0.75

Q4 2008

0.74

Q1 2009

0.70

Q2 2009

0.70

Q3 2009

0.69

In the Providence-New Bedford-Fall River, RI-MA metro area, small businesses will typically sell for 0.69 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 $102,959. Remember, however, that this is in fact an average for revenue multiples in the area. Some entities will have higher revenue multiples and others will have lower revenue multiples.

According to BizBuySell.com, the median revenues for its Providence business-for-sale listings was $352,944 in Q3 2009.

To put this in perspective, the Q3 2008 revenue multiple was 0.75 and the median revenue for listed Providence businesses was $353,300.

Cash Flow Multiples for Providence, RI Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

3.34

Q2 2007

3.40

Q3 2007

3.24

Q4 2007

3.32

Q1 2008

3.22

Q2 2008

3.15

Q3 2008

3.20

Q4 2008

3.16

Q1 2009

3.14

Q2 2009

3.14

Q3 2009

3.22

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 Providence-New Bedford-Fall River, RI-MA metro area was 3.22.

So, a business with cash flows of $110,000 might list for $354,603. 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 Providence, BizBuySell.com reports that the median cash flow for Providence area businesses was $75,000 in Q3 2009. In Q3 2008, Providence cash flow multiples averaged 3.20 and the median cash flow was $79,405.

Number of Providence Businesses for Sale in the Dataset

The study data comprised 226 listings in the Providence-New Bedford-Fall River, RI-MA metro area. As such, some of the businesses used to derive the median valuation might be outside of Providence, but they are in the area and so are likely representative of Providence business valuations.

In Q3 2008, just one year ago, there were 240 Providence listings in the BizBuySell.com dataset. As a result of the recession, fewer Providence business owners are selling because they hope to weather the storm and sell after the economy turns around.

Can I Sell My Providence, RI Business Now?

Selling a business is something you should start preparing to do long before you actually want to sell a business. A common mistake is to wait too long to learn about what it takes to sell a business for a premium price. Even if you don't plan on pursuing an exit for several years, you should start the process now. This useful tip for selling a business comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Providence, RI Businesses

If you are contemplating buying a business or selling a business and would like to appraise the value of a specific business, 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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