How Long Does It Take To Sell A Business?

In a retail business, securing a sale is frequently a matter of listing the merchandise and processing the transaction. The process of selling a product or service can be quite clear, however, selling the company that markets those products is a different experience. For those asking how long it take to sell a business, there is no straightforward answer.

On average, it takes approximately 9 months to sell a business. Jason Brice explains “This is an approximation, and averages are not actuals. The actual time that it takes to sell a business depends on several factors”.

Everything from sale price to market trends, operational standards, sale terms, and financing will all play a role in how long it takes to sell a business.

Timeframes For Selling a Business: Understanding the Variables

Sale Price: One of the primary stalling points when selling a business is price. Setting a listing price can be a sensitive subject. As an owner, you’ve spent years, if not decades, building your brand. This emotional investment can make it difficult to create an objective valuation. An experienced business broker will help sellers evaluate their business, setting an appropriate price that matches their goals, as well as the state of the market.

Market Conditions: The market is in constant flux, however there are some industries that are seen as more secure than others. Current events in both the domestic and global spheres can impact the demand for mergers and acquisitions. When selling a business, timing is everything. If the market is thriving, sellers can expect a quicker sale process, while a downturn in the market can lead to longer timeframes.

Financing Challenges: Sellers are tasked with creating attractive profiles for potential buyers, and this depends largely on revenue. Losing a key customer or vendor contract right before listing can hurt the bottom line and revenue projections, making it harder to attract interested buyers. In the months leading up to a listing, a business broker can help identify potential pain points and advise on how to mitigate the associated risks.

Operations: Projections and revenue maps are based on the business operating as usual. Big shifts to daily operations can alter those projections and send up a distress signal to potential buyers. During the course of a sale, core staff members might leave, leases might come up for renewal, equipment might break down, and other variables might bring operations to a halt. During the course of a sale, there is an assumption that the business will operate as usual, so it is recommended that sellers secure fail-safes before listing.

Legal Barriers: You might expect to jump through a few hoops when selling a home, and you can expect even more when selling a business. When selling a business, it is far more complex than writing a cheque and exchanging keys. Both buyers and sellers have to adhere to governmental regulations, particularly when dealing with international buyers. In the event that a business is facing its own legal proceedings outside the scope of the sale, potential buyers may be hesitant to finalize a sale until their outstanding issues are settled.

Due Diligence: Purchasing a business is a huge investment, so sellers want to make sure that they are as informed as possible, and that means due diligence. The best way to expedite the due diligence process is to have records organized and readily available. A professional broker will walk you through the due diligence process, advising on the best way to showcase the finer details of a business, as well as connecting sellers with a team of financial and legal professionals to ensure the process runs smoothly.

Selling a Business Fast: How a Broker Can Help to Expedite Your Sale Process

The variables above can be seen as hurdles, but your business broker has the experience needed to handle these elements on your behalf. With years of experience in mergers and acquisitions, Jason Brice specializes in guiding sellers over these hurdles and taking them right to the finish line.

When selling a business, the clock does not start when a listing goes live. There are months of preparation needed before a business is ready to be listed. A broker will help to navigate the complex processes involved in a sale, as well as advise on best practices for gathering documentation for presentation and marketing a business for sale. “My goal is to facilitate the sale of businesses and achieve the best rates and terms for my clients, and that all starts with proper preparation”, explains Jason Brice.