How Long Does It Take to Sell a Business

Whether you’re just wondering how long it would take to sell your business or you’re currently going through the process this article is what you are looking for.

Chapters

1.   How long does it take to sell a business?

2.   What is the average length of a business sale?

3.   Why does it take so long?

4.   Third party stakeholders

5.   Legal structures

6.   How to speed up the deal process

How Long Does It Take to Sell a Business?

Selling a business is a very broad statement. Before we can go into how long it takes to sell a business a few other questions need to be asked.

Are we selling a micro business, a small business or medium business?

What is the legal structure of the business?

How many partners are there?

Is it a share sale or an asset sale?

How many premises are involved in the transaction?

All of the above questions will have an effect on the sale and will affect the different moving parts that speed up or slow down a business sale.

I will assume for the purposes of this article that there are fewer than 3 properties involved in the transaction, and it is a share sale.

What is the Average Length of a Business Sale?

The average length of a sale which from the point of deciding to sell your business to completing a sale is 12 - 24 months. That does not mean your business cannot be sold in 3 months. What it does mean is that for most owners, it takes about 12 months.

We are also talking strictly about a sale. If an owner wants to extract the maximum value from a business exit with extensive preparation, that alone can take 12 - 24 months.

Why Does it Take So Long?

The business sale process has 4 main stages. 

“Preparation, Presentation, Promotion and Preservation.”

I call them “the 4 P’s.”

Each P stage takes on average 3 months. Preparation can be extended depending on the state of the business when an M&A advisor is first introduced.

Any delays, whether they be from the owner, business broker, market conditions or buy side extends the time frame which are not uncommon.

Third Party Stakeholders 

One of the most frustrating parts of a business sale is when third parties other than the seller or buyer creates delays.

A good M&A advisor should help you steer through the process.

Landlords, accountants, solicitors and partners can all cause delays. Whether it’s holidays or sickness, the sheer number of professionals involved makes delays commonplace. Summer and other holiday periods are popular times when people are away. 

Hence, third party stakeholders can cause delays to the process.

Business Legal Structures

Luckily most business structures are straightforward corporations. However, if your business operates a complex legal structure ensure you plan around this with your M&A advisor. 

As long as you take the time to simplify the business everything should be straightforward.

How to Speed Up the Business Sale Process

There are ways the sale process can be sped up. 

Just 3 months of planning with the correct advice can ensure your business can get to completion quicker than the average 12 months. 

In fact, my clients who take the basic 3 months of coaching average a successful sale in an average of 6 months from market to completion.

We as much time as clients want in preparation as required. Every client gets access to the “Master the Business Exit” training which educates on the entire sales process. This enables you to have complete control on what can be the most important sale of your life.

Download the checklist to find out more about the business exit process.