Based on local listing data, BizBuySell has noted a decrease in the median asking price for a small business in Houston during the first quarter of 2014. This decrease in asking price doesn’t indicate a down turn in businesses though. Small business revenue is up, creating an ideal set of circumstances for those looking to buy a small business.
BizBuySell is a business-for-sale marketplace for small businesses. They found that the median asking price dropped from $204,000 in 2013 to $200,000 in the first quarter of 2014. Yet these businesses listed for sale reported a $40,000 increase in revenue compared to 2013. The median revenue for small businesses listed for sale during the first quarter was $400,000 compared to $360,000 in 2013. These favorable circumstances provide a window of opportunity for those interested in buying a small business.
Sale revenue multiples are also decreasing according to BizBuySell. Houston small business owners looking to sell their business are asking for a sale revenue multiple of .84 on average. This is a .04 decrease from 2013’s asking multiple of .88 for other small businesses.
Cash flow multiples also increased from 3.03 to 3.15 over the course of the past year. Small businesses listed for sale had a median revenue of $358,844 with a median cash flow of $70,000. This means buyers purchased on average .66 times the revenue and 2.23 time the cash flow.
The combination of these numbers and trend give positive indications that 2014 may be an ideal year for buying a small business in Houston. While these trends will bear watching during the second quarter, the window for buying a small business is now as conditions have generated an ideal market compared to a year ago.
About the Author:
Hi, my name is Blair Thomas and I’m a passionate electronics payment expert who started eMerchantBroker.com in 2011. My company helps high risk businesses lock down the high risk merchant account they need to do business. Check out the eMerchantBroker YouTube Channel for more info on their services.