Chicago Area Business Sales Statistics from Bizbuysell

Bizbuysell just released their latest Market Insight Report for the second quarter of 2018. The report has fresh listing statistics from the latest quarter. But it also provides some data on closed sales on a regional basis for the prior year. The Closed Small Business Transaction Metrics by Geographic Market for the Full-Year 2017 section tracks statistics for 67 local markets.

For the Chicago metro area the median asking price of a business was $299,900. Selling prices came in about 89% of asking prices. And sold businesses had median revenue of $577,000.

The average cash flow multiplier for the Chicago area was 2.39 times. This is about average for the country as a whole from the Bizbuysell report. This multiplier is a little higher than what we are seeing from commercial businesses-sold databases we subscribe to. And of course there is a premium for bigger businesses.

We are seeing considerable variability in the area. The city center is booming with a record number of construction cranes as are many suburban downtowns. However, other parts of the city, some suburbs and downstate cities are struggling. Property taxes are especially onerous for small businesses because they flow through directly to the bottom line of a business.

The next closest metro area Milwaukee fared better, reporting a median selling price of $400,000 and an average multiplier of 2.6 times.

As for multipliers, most metro areas came in between 2X and 3X cash flow. Four metro areas had average multipliers above 3X. One would expect these to be in growing sunbelt areas but surprisingly these were all in northern rust belt cities: Buffalo, NY; Dayton, OH; Albany, NY and Cincinnati, OH. Perhaps the concentration of industrial businesses that survived are thriving and command higher multipliers in the marketplace.

On the other end of the spectrum five cities had multipliers below 2X, making for a nice bell curve. Honolulu, HI had the lowest cash flow multiplier – although the reported number of sales may be too low to be meaningful. Also notable, the Las Vegas area had a median multiplier of only 1.77 times.

As for number of listings, the New York metro area is number one with nearly 6,000 businesses for sale on Bizbuysell. The Chicago are had 721 businesses listed for sale. The Chicago area seems to lag behind other major metro areas in the number of businesses for sale.

In general, closed business sales statistics for the Chicago area continue to be consistently good as the record breaking economic expansion continues.