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Median asking price for Las Vegas businesses drops

The median asking price for 313 businesses listed for sale in Las Vegas in the fourth quarter was $190,000, down from $240,000 or nearly 21 percent in the year-ago period, BizBuySell.com online listing service reported.

The businesses had median revenue of $350,000 and median cash flow — or money that comes out of the business over the course of a year — of $84,360, compared with $409,351 and $101,408, respectively, in the previous year.

Business owners in the Las Vegas area will typically ask for an average revenue multiple of 0.72 and a cash flow multiple of 2.91, down from 0.74 and 3.11, respectively.

The number of closed business-for-sale transactions in the United States, as reported by business brokers, rose by 3 percent in 2010. BizBuySell.com statistics include listings from local business brokers as well as "for sale by owner" listings.

"Spurred on by a strong showing in the fourth quarter, the business-for-sale market showed some promising signs of recovery heading into the New Year," said Mike Handelsman, general manager of BizBuySell.com and BizQuest.com. "In 2010, we saw more deals getting done. One of the key drivers for that growth was that business sellers were more realistic about their business valuations."

The increased business-for-sale market activity came at the expense of a decline in business valuations. The median closed-transaction sale price for 2010 dropped 6.3 percent year-over-year, from $160,000 in 2009 to $150,000 in 2010.

Key metrics used to value companies also fell slightly in 2010, with the average revenue multiple falling 2.1 percent and the average cash flow multiple falling 0.6 percent.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

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