September 23, 2020  
 
  Articles for Entrepreneurs  
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Q3 2009 Business Valuation Data

 

 

Sell My San Jose, CA Business

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

Median Ask Prices for San Jose, CA Businesses

If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the San Jose-Sunnyvale-Santa Clara, CA metro area for the last 11 quarters.

Quarter

Median Ask

Q1 2007

$189,500

Q2 2007

$239,000

Q3 2007

$265,000

Q4 2007

$250,000

Q1 2008

$249,000

Q2 2008

$249,500

Q3 2008

$250,000

Q4 2008

$260,000

Q1 2009

$260,000

Q2 2009

$295,000

Q3 2009

$275,000

As you can see from the chart above, San Jose business-for-sale listings in Q3 2009 had a median asking price of $275,000.

That compares to a median ask price of $250,000 in Q3 2008. Because the median ask price for businesses for sale in San Jose has risen year over year, we can conclude that many smaller firms in San Jose are holding off on selling.

Revenue Multiples for San Jose, CA Businesses

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

Quarter

Revenue Multiple

Q1 2007

0.85

Q2 2007

0.79

Q3 2007

0.71

Q4 2007

0.68

Q1 2008

0.74

Q2 2008

0.78

Q3 2008

0.80

Q4 2008

0.82

Q1 2009

0.88

Q2 2009

0.89

Q3 2009

0.83

In the San Jose-Sunnyvale-Santa Clara, CA metro area, companies will usually sell for 0.83 times the selling company's revenues. The data from BizBuySell.com indicates that is 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 $123,868. Keep in mind that this is strictly an average for revenue multiples in the area. Some companies will have higher revenue multiples and others will have lower revenue multiples.

According to BizBuySell.com, the median revenues for its San Jose business-for-sale listings was $415,743 in Q3 2009.

As a reference point, the Q3 2008 revenue multiple was 0.80 and the median revenue for listed San Jose businesses was $428,094.

Cash Flow Multiples for San Jose, CA Businesses

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

Quarter

Median Cash
Flow Multiple

Q1 2007

2.91

Q2 2007

3.23

Q3 2007

3.00

Q4 2007

2.98

Q1 2008

3.35

Q2 2008

3.28

Q3 2008

3.42

Q4 2008

3.47

Q1 2009

3.60

Q2 2009

3.52

Q3 2009

3.50

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 San Jose-Sunnyvale-Santa Clara, CA metro area was 3.50.

So, a business with cash flows of $110,000 might list for $384,937. That calculation is dependent on the business selling for the area's average multiple. In practice, cash flow multiples can vary considerably from one business type to another.

If you are interested in what cash flows are for a business in San Jose, BizBuySell.com found that the median cash flow for San Jose area businesses was $106,992 in Q3 2009. In Q3 2008, San Jose cash flow multiples averaged 3.42 and the median cash flow was $104,158.

Number of San Jose Businesses for Sale in the Dataset

The study data comprised 146 listings in the San Jose-Sunnyvale-Santa Clara, CA metro area. As such, some of the businesses used to derive the median valuation might be outside of San Jose, but they are in the area and so are probably representative of San Jose business valuations.

In Q3 2008, just one year ago, there were 166 San Jose listings in the BizBuySell.com dataset. As a result of the recession, fewer San Jose business owners are selling because they hope to weather the storm and sell after the economy turns around.

Can I Sell My San Jose, CA 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 San Jose, CA 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 published quarterly. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for additional information.

 

 

 

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