How Long Does It Really Take to Sell a Business?
One of the very first questions we get from prospective sellers is “How long will this take?”
The truth is that we’ve seen anything from 2 days to 2 months to 2 years…but the average will be 6 to 9 months.
And that doesn’t include the “pre-listing” process – your actual decision to sell, which will include discussions with us, a professional valuation, and then prepping the documents and paperwork that buyers will want to see immediately.
Once you’ve completed all of that, we’re looking at 6-9 months.
Why does it take so long?
Well, it’s not actually “so long.”
Perhaps in the internet age of “everything now” six months may seem like a long time, but it’s just simply a reality given the amount of work that needs to happen.
Firstly, your business needs to be marketed. We need to get the word out to interested buyers about what you’ve got to offer. Some buyers may be romanced by your industry, while others may be interested in your cash flow. Some want both, plus significant growth potential.
Secondly, the price really matters. This is why we work hard with our clients to make sure the business is appropriately, and attractively, priced. A valuation helps get us to the right price, but so does disabusing sellers of fantasies about “what my business is worth” that have no basis in financial reality.
A business is worth what the market is willing to pay. A solid valuation goes a long way to identifying that number with some precision.
Closing
If taking your business to market is the “dating” phase of selling your business, closing is the “marriage.”
You could spend 1-3 months taking meetings with serious buyers. You need to realize that selling a business is a new part-time job you’ve added to your life.
You’ll need to be chasing down requests from your broker and potential buyers, and you’ll need to do so in a timely manner. You must do all of this while being patient and realizing that even though you may be ready to exit the business, it’s going to need you for just a bit longer to get through the transition.
Once you and a buyer have agreed on an offer to purchase, due diligence (or as someone else once put it, “trust, but verify”) begins.
The buyer will need to examine your records and verify that the business is as advertised. He/she will also need to arrange for financing, a lease, and other variables like software licenses or other licenses required by the state or municipality.
Stay focused
We can share many stories of business transactions with you, but the “easiest” ones involve patient and focused buyers and sellers. These people know that a business transaction isn’t to be rushed through, but done thoughtfully and with professionalism.
If you prepare for a timeframe of 6-9 months, you can be pleasantly surprised if it happens faster (as it sometimes does) or more understanding if it takes a little longer (which it sometimes will).
Remember that the journey of selling a business starts with a conversation with one of the brokers on our team. Let us know if we can help you with this next stage in your business journey.
