BizBuySell recently released their Insight Reports for the 1st Quarter of 2015 with some very positive news. Overall “business sales” were up 6% vs. 1st quarter 2014. This level of performance is continuing a 2-year trend in business sales. Below are a few additional summary items from BizBuySell’s reports.
- Median Cash Flow for sold businesses reached a record high since 2007 of $104,000.
- Why the increase- baby boomers continue make the step to retirement, and buyers are seeing more options and access to capital from lending institutions
- Median revenue was $442,000 up from $400,000 representing a 10.5% increase.
- The average asking price was $225,000 up from $199,000, a 13% jump.
- Average sale price was $200,000 up from $175,000, up 14.3%.
- Service businesses sold lead the charge up 18% over the 1st quarter of 2014.
- Retail revenue was $537,500 vs. $437,783, up 22.7%.
- Cash flow for the retail sector averaged $99,355 up from $89,907, a 10.5% increase.
- Cash flow multiples for all businesses averaged 2.27 up from 2.21
To help show a picture of what happened in the 1st quarter of 2015 for California below is a chart showing the number of business’s listed and the average cash flow multiple. We also added a column using $200,000 cash flow as an example to show a California market comparison.
|California Highlights||# listed||Cash Flow Multiple||Hypothetical 200kCash Flow x Multiple = Listing Price|
|Contra Costa-Alameda-Solano, CA||203||2.69||$538,000|
|San Diego-Carlsbad-San Marcos, CA||356||2.57||$514,000|
|San Francisco-Oakland-Fremont, CA||316||3.02||$604,003|
|San Jose-Sunnyvale-Santa Clara, CA||157||3.12||$624,006|
Sentiment in the market place is stated as positive for the rest of 2015. Let’s hope that’s the case. To read the full report click on BizBuySell Quarter 1 2015 Insight Reports.
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