How Long Will it Take to Sell Your Business
You’ve done it. You worked hard to start and grow a successful business over many years. Now, it’s time to sell it. So how long does it take to sell your business. That depends. We break down the median time based on market data of different businesses to understand what drives the timeline of typical business sales.
The process of selling a business starts well before it’s listed for sale. Two to three years out, owners want to make sure they make their business appealing to potential buyers. To do that, the process typically involves switching from tax minimizing to profit maximizing financial strategies, hiring or promoting employees to run day-to-day operations with minimal owner involvement, and creating financial and operating documentation so that would-be buyers can reliably evaluate the business opportunity.
After that, then how long does it take to sell after listing your business?
The general rule is it takes six to 12 months to sell a business. Obviously, more higher priced businesses will take longer than lower priced businesses. Simple business models will sell faster versus more complex. Employee run business sell faster than a owner managed operation. Some never sell at all. The greater amount of money involved, the greater risk for buyers so there’s more time in the initial evaluation period. Evaluating financials, market analysis and operating history all take time.
Other factors that speed up or slow down a business sale according to BizBuySell include:
- Nature of revenue stream — Think recession-proof businesses. They’re more adaptable and tend to sell faster.
- Financing availability — Business owners that offer some form of financing tend to sell faster because they’re alleviating some of the risk.
- Seller responsiveness and organization — Sellers who are organized and quick to get information and forms into the right hands tend to sell faster.
- Buyer experience — More experienced business owners will sell more quickly versus newcomers to the market.
- Location — Business sellers in a large market tend to sell quicker than those in less populated areas.
All this to say, these are just trends and can’t predict the time that it will take YOU to sell your business. Every business sale is unique and the time it takes to close is driven by both the buyer’s conduct and yours.