A large portion of baby boomers are business owners because the scarcity of jobs when they entered the workforce drove them to create their own jobs and become...
How Long Will It Take to Sell My Business?
I just put my business on the market. How long should it take to sell? Is this time period pretty accurate?
Take this quick quiz:
What is black and white? (Choose the wrong answer)
- A zebra
- A penguin
- A nun
- A skunk
- A police car
- The answer to “how long will it take to sell my business?"
The answer is 6.
How long after a girl and guy start dating do they get married? The answer obviously depends on several factors. Let’s explore those factors and see what you can do to speed up this process.
What factors determine how long my business will take to sell?
- Price of your business (If price is more attractive, it will sell faster.)
- Price of your business (Lower-priced businesses typically sell faster.)
- The industry your business is in and how popular it is
- Whether or not you are offering seller financing
- Where your business is located (Businesses in large cities sometimes sell faster.)
- How and where you are advertising your business
- How you are handling the sale process (the marketing material you have prepared, etc)
Ok, now for the magic all shades of gray answer. On average, businesses sell in 6-9 months. Sometimes sooner, sometimes later, and sometimes not at all. It represents a “bell curve” with most sales taking from 3-12 months.
Here are some points on how long each phase of the process takes:
- Packaging and preparing the business for sale – 1 to 3 months
- Marketing the business and finding a buyer – 1 to 9+ months
- Due diligence – typically 1 month
- Closing the transaction – typically 1 month
Now, in a good market and with a business that is priced fairly and no major roadblocks, the sale process should be from 5 to 9 months. Did you notice I said “no major roadblocks”? Unfortunately, nearly every deal I have been involved in had at least one major roadblock. Just assume this is going to be the case and deal with it when it arises, and you will be fine.
I don’t believe you. I think you are just scared to say how long it will take because you don’t want to be blamed if it doesn’t sell in the time you said it would.
Ok, you got me, sorry. Your business will sell in two years. Are you happy now? Really though, selling a business is not an easy task. Because it is a very inefficient market (unlike residential real estate), it can be difficult to predict the time frame. This is mainly due to the confidentiality of the sale process and also due to the low level of cooperation among brokers. Buying a business is also an emotional process involving a complex decision making process that is highly unpredictable. Many sales also fall apart due to problems with the landlord or innacurate financial statements. Why do you think brokers charge such high rates? It is because it is a lengthy and difficult process involving a lot of complicated steps.
What can I do to sell my business faster?
- Price your business fairly
- Offer seller financing
- Market your business for sale using the most effective media possible
- Have a specific strategy for dealing with buyers, using an attractive marketing package
- Market your business for sale in the closest large metropolitan area
This sucks; how can I deal with the stress of not knowing when it well sell?
You have two options. Weight them closely and choose what you believe the best route to be.
Option # 1
Try alcohol, cocaine and marijuana on the weeknights to blunt your emotions, and avoid facing reality. On the weekends, join a radical fascist group, such as the “voluntary movement for extinction of mankind,” while simultaneously selling multi-level marketing to your closest friends and family to create additional “streams of wealth.”
Accept the fact that you don’t know when it will sell and deal with it. Run the business as if you are not going to sell it. Go through the sale process and execute the necessary steps to sell your business while trying not to get too emotionally involved. Read this again twenty times; this is very, very important. I see many sellers have a mental breakdown after they get wrapped up with a buyer for 4 months, only to have it implode at the last minute.