September 20, 2020  
 
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Q3 2009 Business Valuation Data

 

 

Sell My Richmond, VA Business

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

Median Ask Prices for Richmond, VA Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Richmond, VA metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$262,500

Q2 2007

$240,000

Q3 2007

$232,000

Q4 2007

$220,000

Q1 2008

$200,000

Q2 2008

$218,000

Q3 2008

$217,000

Q4 2008

$213,000

Q1 2009

$200,000

Q2 2009

$210,000

Q3 2009

$220,000

As shown in the table, Richmond business-for-sale listings in Q3 2009 had a median asking price of $220,000.

That compares to a median ask price of $217,000 in Q3 2008. Because the median ask price for businesses for sale in Richmond has risen year over year, we can conclude that many smaller firms in Richmond are holding off on selling.

Revenue Multiples for Richmond, VA Businesses

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

Quarter

Revenue Multiple

Q1 2007

1.39

Q2 2007

1.09

Q3 2007

0.99

Q4 2007

1.17

Q1 2008

1.37

Q2 2008

1.18

Q3 2008

1.14

Q4 2008

1.00

Q1 2009

0.92

Q2 2009

0.92

Q3 2009

0.70

In the Richmond, VA metro area, small businesses will usually sell for 0.70 times the selling company's revenues. As shown in the chart above, that was the mean revenue multiple for Q3 2009 in this part of the country.

In other words, a firm with revenues of $150,000 might list for $104,286. Remember, however, that this is just an average for revenue multiples in Richmond and surrounding communities. Some businesses will have higher revenue multiples and others will have lower revenue multiples.

According to BizBuySell.com, the median revenues for its Richmond business-for-sale listings was $414,241 in Q3 2009.

As a reference point, the Q3 2008 revenue multiple was 1.14 and the median revenue for listed Richmond businesses was $350,000.

Cash Flow Multiples for Richmond, VA Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

4.03

Q2 2007

3.72

Q3 2007

3.38

Q4 2007

3.79

Q1 2008

4.36

Q2 2008

3.83

Q3 2008

3.64

Q4 2008

3.44

Q1 2009

3.21

Q2 2009

3.09

Q3 2009

2.83

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 Richmond, VA metro area was 2.83.

So, a business with cash flows of $110,000 might list for $311,616. That's only if the firm complies with the local average. Cash flow multiples will usually vary considerably based on many factors.

In case you were wondering what typical cash flows are for a business in Richmond, BizBuySell.com determined that the median cash flow for Richmond area businesses was $90,000 in Q3 2009. In Q3 2008, Richmond cash flow multiples averaged 3.64 and the median cash flow was $87,000.

Number of Richmond Businesses for Sale in the Dataset

The study data comprised 99 listings in the Richmond, VA metro area. As such, some of the businesses used to derive the median valuation might be outside of Richmond, but they are close by and so are probably representative of Richmond business valuations.

One year ago, in Q3 2008, the BizBuySell.com dataset for Richmond spanned 103 listings. In a market where you would think fewer business owners would be selling it's a bit surprising to see more Richmond business-for-sale listings.

Should I Sell My Richmond, VA Business Now?

The market is turning around and it's a great time to sell. Still, you may have to be creative. For example, with credit still relatively tight, you might want to consider offing seller financing to a buyer. This will improve your odds of closing a business-for-sale transaction. This helpful tip comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.

Business Valuations for Richmond, VA Businesses

If you are contemplating 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 published quarterly. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for additional information.

 

 

 

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