You may have wondered how long will it take to sell your business—and it’s not as quick, easy, and smooth as you think.
Selling a business—complex, time-consuming, and demanding of patience—requires both preparation and a well-devised strategy.
No matter if you’re a first-time entrepreneur or an experienced business mogul—understanding the factors influencing the time it takes to sell a business is key to navigating this intricate expedition.
That’s why you’re here to learn the hows and whys.
We’ll delve into these factors, examine the standards for selling a business, and unveil strategies to accelerate the sale process.
At some point, you may have done a comparison of the transaction duration of real estate and business sales duration.
Short answer? They’re completely different.
Although, real-estate sales often go by at an average of 40-70 days, selling a business can take longer than that—and probably for a couple of good reasons.
Several factors can influence the duration of the business sale process, including:
- Size and complexity of the business—Larger, more intricate businesses generally take longer to sell compared to smaller, simpler ones. Why? Potential buyers need more time to comprehend the business’s complexities and carry out thorough due diligence.
- Industry trends and market conditions—Demand for businesses in your sector and the economy’s overall health significantly impact the time it takes to sell. When markets are thriving and demand is high, businesses tend to sell faster. Conversely, economic downturns or industry-specific challenges can decelerate the process.
- Valuation and asking price—A business priced exorbitantly may struggle to find a buyer, while one priced too low could attract a vast pool of potential buyers but yield a less favorable deal. Striking the perfect balance with your asking price is crucial for selling your business within a reasonable time frame.
- Business readiness and presentation—The way you prepare and showcase your business for sale greatly impacts buyer interest and the time it takes to sell. Businesses boasting organized financials, a clear growth plan, and an impeccable presentation are more likely to entice buyers and close deals swiftly.
Business Sale Timeline
Your readiness to sell is proportional to the probability of selling your business faster. Lingering thoughts of indecisiveness or lack of preparedness do more harm than good.
If you want to ensure that you, the owner, are ready to face a new chapter in life, here are some questions to ask yourself.
Moreover, understanding these typical stages and timelines of the business sale process can help you set realistic expectations and plan accordingly.
Here’s a general overview of the timeline:
Estimated Duration: 3-6 months
- Assessing your reasons for selling – Reflect on your motivations and determine whether it’s the right time to exit.
- Getting your financials in order – Organize and review your financial statements to ensure they accurately represent your business’s performance.
- Identifying areas for improvement – Pinpoint areas where your business can enhance its value, and take steps to address those opportunities.
- Preparing documentation – Compile essential materials, such as a Confidential Information Memorandum (CIM), to present your business professionally to prospective buyers.
- Adding additional key team members – Too often businesses are centered around the current owner. This makes an immediate challenge for new ownership. By handing off responsibility to new team members the business’s ability to transition to a new owner is that much higher.
If this is too broad and general, here’s an in-depth guide on how to prepare your business to sell.
Estimated Duration: 3-12 months
- Developing a marketing strategy – Formulate a targeted plan to showcase your business to potential buyers, leveraging your niche expertise.
- Crafting a compelling business listing – Create an attractive and persuasive listing that highlights your business’s strengths and opportunities.
- Identifying potential buyers – Pinpoint and engage with prospective buyers who have the capacity and interest to acquire your business.
- Managing confidentiality during the marketing phase – Maintain discretion and protect sensitive information throughout the marketing process.
Estimated Duration: 1-3 months
- Reviewing offers and negotiating terms – Evaluate proposals from potential buyers and negotiate favorable terms, showcasing your business selling prowess.
- Providing requested information for buyer due diligence – Supply necessary documentation and data to facilitate a thorough examination of your business by interested parties.
- Addressing any concerns or red flags that arise – Proactively tackle issues or discrepancies that emerge during the due diligence process.
Estimated Duration: 1-3 months
- Collaborating with legal counsel – draft and finalize a comprehensive sale agreement.
- Considering other options – think about what to do next. Do you want to stay with your business or move out immediately?
In a nutshell, selling a business can take anywhere from 6 months to 2 years, sometimes even longer – depending on its size, complexity, and those factors we mentioned earlier.
Although this timeline isn’t any different from typical business brokers, Tsetserra Growth Partners offers way more than just this.
You can learn more about our entire process instead here.
How to Accelerate the Business Sale Process
While there’s no guaranteed way to shorten the sale process, adopting the following strategies can help improve your chances to make it quicker:
- Preparing thorough and accurate financials: Clear, organized financial records are essential for attracting serious buyers. Ensure your balance sheets, income statements, and tax returns are up-to-date and readily available. This will not only demonstrate your business’s financial health but also reduce the time spent on due diligence.
- Establishing a realistic asking price: Work with a professional to accurately value your business or simply head over to our free Business Valuation tool. Overpricing your business can lead to a longer time on the market, while underpricing may result in a less profitable sale.
- Identifying and targeting potential buyers: Proactively seek out potential buyers who may have a genuine interest in your business. This could include competitors, suppliers, or customers who understand the value of your business and are more likely to move quickly in the buying process.
The only disadvantage you have with option number one is the tendency of brokers to go for an average sale and make a run for it—ruining your experience.
With Tsetserra Growth Partners, not only do we settle for the highest quality sale possible but also we stick around and guide you post-sale.
Delays in the Process
Despite your best efforts, delays can still occur during the business sale process. Here’s how to manage these challenges:
Be prepared to address common concerns or obstacles during negotiations and due diligence.
This could include providing additional documentation, clarifying misunderstandings, or renegotiating certain terms of the deal.
If your business isn’t attracting interest or offers, it may be time to reevaluate your marketing strategy, asking price, or presentation.
Be open to feedback from potential buyers or advisors and make adjustments as needed.
Selling a business can be emotionally draining, and delays can exacerbate this.
Stay focused on your goals, and remember that perseverance and a positive mindset can go a long way in overcoming obstacles and ultimately closing the deal.
Sellers should also understand that any of the standard procedures above should not be considered a “one-size-fits-all” solution.
The process of selling a business is rarely straightforward, and the time it takes to complete a sale can vary widely.
Unlike any other sales in different niches, successfully making a business sale does not happen within days, let alone overnight.
However, we fully understand how intricate the process can get.
In order for you to have it easier, we’ve created a free Business Valuation tool that lets you estimate your business’s current market value and provided more information in Our Process here.
Moreover, you can just simply get in touch with us and let our team behind Tsetserra Growth Partners have your back!