How Long Does it Take to Sell a Business?
There are many assumptions made in the process of selling a business. While timelines are always dependent on the state of the market, finances, industry, and the investment opportunities available to both buyers and sellers, it is the case that sellers frequently underestimate the length of the timeline, as one survey found.
How Long Does it Take to Sell a Business?
Nearly 44 percent of business owners surveyed believed a sale would take five months or less. However, for most business owners, it takes longer. A six to 11-month window, according to brokers, is the most realistic time frame to complete a business sale. This means it could take some sellers up to a year. The time frame from marketing the business for offers to the final stages of negotiation with a buyer can vary greatly. This is a highly participatory process with many moving parts on both sides of the table. While we can’t speed up time, there are a few ways we recommend a seller to prepare themselves for a successful transition of ownership.
How to Sell a Business Fast: Our Roadmap
Our roadmap to selling a business fast is reviewed in five steps:
Meet with your accountant for financial due diligence
Complete a business valuation
Ready your team to prepare for the transition
Create an ideal buyer profile
Find a business broker
Key Factors that Determine How Quickly You Can Sell Your Business
Staying organized has a huge advantage for sellers looking to move quickly. Having an ideal buyer profile can help the seller target exactly the type of buyer they are looking to attract. Vetting buyers is an important step in the sales process by ensuring that both parties are a good mutual fit for the transaction. Competitors often serve as excellent potential buyers because they are already in the industry and have the infrastructure and know-how necessary to take over the business.
Another tip is to have a handle on the state of the business’s finances. It can be a mess to sort through backlogs of profit and loss statements if you aren’t armed with the information you need going into the transaction. Spend some time with your accountant if you have one, or start mining your files now to get a temperature on your financial situation. Buyers will be interested in projecting the value of what you’ve created into the future. A business valuation is a great way for sellers to get a baseline for how they are performing financially and what aspects of the business might be the most appealing to buyers.
Getting an M&A advisor or business broker is another simple way to ease the burden of the sale. It feels good to have someone to advocate for your needs as a business owner in the complexities and nuances of a business sale. Balancing the integrity of sensitive information while the sale is still pending is another aspect a business coach offers. Experienced business brokers and M&A advisory firms can go a long way in helping a business sell quickly and foresee roadblocks with the transaction.
A business broker can help their client enjoy the sale with clear structure and guidelines, clarify the right data to navigate due diligence, pre-qualify prospective buyers, negotiate terms and conditions, and close the sale with ease. This gives the seller peace of mind to have experienced professionals guiding them through each step as they gather financial information and prepare their leadership team for the hand-off.
Mistakes to Avoid When Trying to Sell a Business Too Quickly
Anticipating the apprehensions of your team and employees during the sale is one much-overlooked element when selling your business. With any transition, it is normal for stakeholders to experience anxiety around a change in ownership. Staff may need more support and frequent communication during this time. A major responsibility of the seller is to put their team at ease by ensuring the right people are in place to lead the next chapter of the business. A smooth hand-off will ensure business continuity is achieved before, during, and after the sale.
One more common mistake, related to selling a business, is when the seller overvalues what they’ve created. This is directly related to a lack of research around what current market conditions dictate the business is worth. It could be worth less, or it could be worth more than what the seller is anticipating. Either way, it is important to base the business sale price on data gathered from a business valuation and not on gut instincts or hunches of what the business owner thinks it might be worth. This seems obvious but it’s easy for owners to have emotional attachments to what they’ve created after many years of labor.
We’ll Teach You How to Sell Your Business Quickly at the Highest Price
Selling your business quickly and at the highest price is more about preparation than it is about the final transaction. The more knowledgeable and prepared you are on market conditions and buyers, the better off your business will perform. Knowing now that the completion of a sale can take up to a year, selling a business is about playing the long game. If the conditions are right, the buyer is well-suited, and the right people show up at the table, the process can be much simpler. Instead of focusing on the desired timeline, sellers are more pleased with the result of their sale when they anticipate the buyer’s needs, price their business accurately, and act in the best long-term interests of their team by appointing the right leaders. The best strategy to sell your business quickly and at the highest price is to carefully attend to all of the due diligence that is necessary to have a thorough and successful sale.
