If you’re considering whether or not to sell a business, you may be wondering how long the process takes. While the business exit process varies, most owners can anticipate a six- to nine-month process from signing a listing agreement to closing. Some things, however, 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 business sales process can be tiring. The desirability of your company depends on the current market and a variety of factors specific to the business. Prospective buyers will want to address any potential issues that could arise in their purchase. Then, if you’re ready to sell a business, 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 and sell a business, 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 are better off staying, modifying your business plan, and growing it before you exit.
2. Preparedness of the Business for Market
The time and effort you’ve put into preparing your business for sale impacts potential buyers’ interests. Key documents are necessary, including clear records of cash flow and verifiable financials, but little details also matter. Consider 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 before you agree to sell a business.
Proper promotion of your listing can be the difference between reaching a pool of qualified buyers or waiting for years. 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 to sell a business ensures a fair sale price, which is likely to shorten negotiations and speed up the business sale process.
Despite the average time from listing to close, these factors make a significant difference in how long it takes to sell a business. The good news is: you don’t have to go through the process alone. The professionals at Indiana Business Advisors 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
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Edwin Mysogland, CVA, CEPA, CMEA
Managing Partner, Indiana Business Advisors
Indiana Business Advisors is the top business brokerage firm in the state of Indiana and one of the largest in the Midwest. Whether you are looking to a buy a business or sell a business, Indiana Business Advisors has the expertise and experience to get the deal completed. With over 40 years of history and 2200 businesses sold all over the United States, our team will work diligently to achieve your professional and personal goals.