If you’re considering exiting your business, you may be wondering how long the process takes. While the process varies, most business owners can anticipate a six- to nine-month process from signing a listing agreement to close. However, some things impact the length of a business sale. In this article, we answer the question, “How long does it take to sell a business?” and share tips for a streamlined and profitable sale.
4 Things that Impact the Time it Takes to Sell a Business
The sales process can be tiring. The desirability of your small business depends on the current market and a variety of factors specific to your business. Prospective buyers will want to address any potential issues that could arise in their purchase. If you’re ready to sell your business then, the good news is that there are ways to speed up the amount of time it takes to reach an agreement. Before you list your business for sale, take these factors into consideration.
1. The State of the Market
The longtime seller’s market has changed as a result of COVID-19. To stay competitive, you’ll need to be realistic with your business valuation and continue operating and pivoting to remain profitable.
The specifics of your industry also come into play. If your business has already rebounded from the pandemic’s effects, then you are likely in a better position to potential buyers. Ultimately, you need to decide if your business is healthy enough to pose for a sale. If it’s not, you may be better off staying, modifying your business plan, and trying to grow it before your exit.
2. Preparedness of the Business for Market
The time and effort you’ve put into preparing your business for sale impact potential buyers’ interests. Key documents, including clear records of cash flow and verifiable financials are a given, but little details also matter. Consider your curb appeal and how buyers will feel walking in to assess the business.
You’ll also want to take a closer look at your exit strategy. Determine how you’ll facilitate the business’s handoff and set the new owner up for success. Expect a buyer to want to know your involvement in the company, and address any potential red flags.
Proper promotion of your listing can be the difference in reaching a pool of qualified buyers or waiting for months. Online marketplaces are a great place to start, but to ensure that your confidentiality is maintained and that your business is shown to qualified buyers, it’s often best to work with a professional.
4. Asking Price
Last, but certainly not least, the asking price of your business can bring buyers in or push them away. Don’t let your emotional attachment to what you’ve built cloud your judgment. Working with a business broker in this process can ensure a fair sale price, which is likely to shorten negotiations and speed up the sale process.
Despite the average time from listing to close, these factors make a significant difference in how long it takes to sell your business. The good news is, you don’t have to go through the process alone. The professionals at Sunbelt Business Brokers have the expertise to help you every step of the way. Get in touch with a business broker to start on your path to a successful sale.
Source: Sunbelt Network