If you are looking into brokering a business deal, you may be wondering how long the selling process can take. The prospect of selling your business can be nerve-racking. Business owners have to be proactive and consider all possibilities when selling their business. Some businesses sell in less than six months, and others never sell at all.
According to AllBusiness.com, 28% of all brokers stated it takes six months or less to sell a company. 31% of all brokers have indicated it takes nine months, and 21% of all brokers say it takes 12 months. Only 10.5% of business owners reported that it took over a year to sell their business. Many experienced business brokers suggest that it takes anywhere between 6 and 12 months to sell a company on average.
Variables that Affect How Long it Takes to Sell a Business
How long it takes to sell your business will depend on the factors impacting the speed and success of your business sale. Professional business brokers have found that the following factors have a profound impact on how quickly a business can sell:
- Buyer
- Business type
- Inquiry response times
- Location
- Purchase price
- Structure and organization
A Realistic Timeline To Sell A Business
Many business owners exhibit a sense of urgency when they want to close a deal. However, many don’t anticipate the time it takes and all of the factors involved. That’s why it’s essential for sellers to be prepared for a lengthy process before putting their business on the market. This may prevent them from undervaluing their business.
The following steps can help business sellers create a realistic timeline for selling their business:
Make Sure The Business Is Prepared to Be Sold
If you wish to facilitate a smooth selling process, make sure your business has a descriptive listing and at least three years of detailed financial statements. Providing documents like an income statement, cash flow statement, balance sheet, and the seller’s discretionary income can add credibility to your business deal.
Make Simple Aesthetic Improvements
Many prospective buyers base their first impression of a business on its appearance. Small aesthetic improvements like a fresh coat of paint, improved landscaping, and in-store upgrades can improve a business’ appearance. The improved appearance will attract buyers uninterested in renovations and help you sell your business faster.
Consult With A Business Broker
Seeking help from a qualified mergers & acquisitions (M&A) professional could potentially speed up the time it takes to sell your business. Business brokers also help ease the stress of selling your business. If you’re having trouble identifying the right business brokerage firm, Neumann & Associates recommend that you find one that can help you before you get started with selling your business.
Establish A Sale Price
Appraisers, M&A professionals, and business brokers can help you to set a realistic valuation of your business. This valuation can take a couple of weeks. Business brokerage firms use various valuation methods to help estimate your business’ worth.
Proper Listing Preparations
Sellers and their advisory teams can develop a list of prospective buyers while compiling all the business’ sale information. This often includes the content of the public listing and confidential information if the buyers have signed a non-disclosure agreement.
Market The Sale Of Your Business
The state of your business’ market will have a huge impact on how fast your business gets sold. Putting your business in front of those looking to buy it takes time and effort. This doesn’t have to be time wasted and can be used to improve the listing of your business.
The steps to selling your business will be specific to your company and the market. That’s why it’s important to lay out a plan that aligns with your goals and timelines while being realistic. Selling a business can be stressful, but developing a strategy can help expedite a successful sales process.
Fast-track The Sale of Your Business
Owners have vital reasons for selling their businesses. Waiting to sell their business could be holding their other business endeavors back. Fortunately, the following steps can help owners to fast-track the sale of their business:
- Selling a business internally to an employee of the company can speed up the sales process because employees understand how the business makes profits and how to run the organization.
- Selling to prospective business contacts, for example, companies similar to yours or individuals interested in purchasing your business, can also speed up the process. Competitive companies may see the sale of your business as an opportunity for them to expand, so they may make you an offer on the spot.
- Selling your business’ assets can be a viable option for those trying to sell a company that is not making a profit. Selling assets that other businesses want and selling your brand and customer lists separately could help to increase your chances of finding a buyer.
- Financing the sale of your business could help new buyers. Seller financing is a shortcut because buyers won’t need to come up with all the money upfront, and this can help facilitate deals much faster.
The Next Step In Selling My Business
Understanding how long the process of selling your business can take and what steps affect it will help you prepare for the sale of your business. Getting a business valuation is one of the most important steps you can take in selling your business because it will help you develop a plan to efficiently sell your business.