September 29, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My Sacramento, CA Business

We just received the latest Sacramento, California business valuation data for Third Quarter 2009.

Median Ask Prices for Sacramento, CA Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Sacramento--Arden-Arcade--Roseville, CA metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$299,900

Q2 2007

$249,000

Q3 2007

$240,000

Q4 2007

$225,000

Q1 2008

$217,500

Q2 2008

$199,000

Q3 2008

$199,000

Q4 2008

$229,450

Q1 2009

$228,000

Q2 2009

$225,000

Q3 2009

$250,000

As you can see from the chart above, Sacramento business-for-sale listings in Q3 2009 had a median asking price of $250,000.

That compares to a median ask price of $199,000 in Q3 2008. Because the median ask price for businesses for sale in Sacramento has risen year over year, we can conclude that many smaller firms in Sacramento are holding off on selling.

Revenue Multiples for Sacramento, CA Businesses

Here is how median revenue multiples are tracking in the Sacramento area, based on BizBuySell.com's economic data.

Quarter

Revenue Multiple

Q1 2007

0.67

Q2 2007

0.73

Q3 2007

0.76

Q4 2007

0.74

Q1 2008

0.81

Q2 2008

0.77

Q3 2008

0.76

Q4 2008

0.72

Q1 2009

0.73

Q2 2009

0.75

Q3 2009

0.77

In the Sacramento--Arden-Arcade--Roseville, CA metro area, businesses will typically sell for 0.77 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 $115,983. Keep in mind that this is simply 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 Sacramento business-for-sale listings was $409,500 in Q3 2009.

As a reference point, the Q3 2008 revenue multiple was 0.76 and the median revenue for listed Sacramento businesses was $423,167.

Cash Flow Multiples for Sacramento, CA Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

2.72

Q2 2007

3.19

Q3 2007

3.47

Q4 2007

3.65

Q1 2008

3.62

Q2 2008

3.33

Q3 2008

3.18

Q4 2008

3.24

Q1 2009

3.24

Q2 2009

3.38

Q3 2009

3.43

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 Sacramento--Arden-Arcade--Roseville, CA metro area was 3.43.

So, a firm with cash flows of $110,000 might list for $376,988. 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 Sacramento, BizBuySell.com reports that the median cash flow for Sacramento area businesses was $93,131 in Q3 2009. In Q3 2008, Sacramento cash flow multiples averaged 3.18 and the median cash flow was $90,000.

Number of Sacramento Businesses for Sale in the Dataset

The study data comprised 154 listings in the Sacramento--Arden-Arcade--Roseville, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of Sacramento, but they are nearby and so are probably representative of Sacramento business valuations.

In Q3 2008, just one year ago, there were 233 Sacramento listings in the BizBuySell.com dataset. As a result of the recession, fewer Sacramento business owners are selling because they hope to weather the storm and sell after the economy turns around.

Can I Sell My Sacramento, CA 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 Sacramento, CA Businesses

If you are considering 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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