• Oct 17, 2007
  • Orange County Register

O.C. businesses sell for less than those in other states

posted by Jan Norman

Orange County’s houses may be among the most expensive in the country, but that’s not true of our small businesses.

That’s the word from BizBuySell.com, a Bay Area-based Web site that at any given time lists more than 48,000 businesses for sale around the country. This is the first time the site has released quarterly data of businesses for sale locally and nationwide.

Here’s the typical business for sale in the third quarter in the Orange County-Los Angeles-Long Beach area:

  • asking price was $225,000
  • median revenue was $354,000
  • median cash flow was $90,400
  • average asking price was 0.85 times revenue and 3.0 times cash flow

In comparison, the typical business for sale nationwide:

  • asking price was $250,000
  • median revenue was $400,000
  • average asking price was 0.93 times revenue and 3.47 times cash flow.

The chart below gives the breakdown by type of business.

bizbuysell-chart-101607.gif

Why the difference? BizBuySell General Manager Mike Handelsman has a few educated guesses.

“The real estate market is based on supply and demand. Orange County is a desirable mike_handelsman.jpgmarket because of the weather and proximity to beaches,” he says. “But in the business market, pricing in general depends on a multiple of revenue and cash flow.

“The fixed costs are higher in Orange County (than elsewhere in the nation) because of labor costs, insurance, energy prices, all of which makes it more difficult to make a living from owning a small business,” he adds.

BizBuySell is really a small-business marketplace, with 90 percent of listing for less than $1 million. Although only 10 percent of businesses nationwide are sold through business brokers, the majority of BizBuySell listings are by brokers.

Still, you can list your own business for sale on the site, which recently added a tool to allow you to compare your business by type, location, revenues etc. and find out what comparable businesses are selling for on BizBuySell.

“It’s not perfect, but it’s a benchmark of reported transactions, Handelsman says.


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BizBuySell is the Internet's largest and most heavily trafficked business for sale marketplace, with more business for sale listings, more unique users, and more search activity than any other service.