How Long Should it Take to Sell a Business?
The Timeline is Dependent By the Seller
There are a number of factors which must be considered when answering this question, including: (i) the sellability of the business – is it in a highly desirable industry, has the owner crafted the company to make himself indispensable?; (ii) the asking price for the business – is the price based upon what the market will pay, or is it based upon what the owner needs to receive in order to retire?; and (iii) what’s been the trajectory of the business during the past three years – are sales going up, down, or sideways, and has cash flow been going up, down, or sideways?
Although every business is different, assuming the business is reasonably sellable, the asking price is market-based, and the business does not have a downward trajectory, a professional M&A advisor should be able to obtain a fair offer from a qualified buyer within 5 to 9 months after a business starts to be marketed. It then takes about two (2) months for due diligence to be completed, legal documents to be agreed to, and financing to be arranged for closing.
Before the company can be marketed, a professional M&A advisor needs about 4 weeks to prepare the marketing documents. This timeline is dependent to a great deal by the seller. In order to prepare the marketing documents, the seller need to answer a considerable amount of questions and obtain a fair amount of documentation. So, in order to keep the total timeline for selling a business to 8 to 12 months, it is incumbent for the seller to address these issues in a timely fashion.
The Summit Acquisitions Group — Business Brokers and M&A Advisors — specializes in the sale, appraisal, and financing of privately owned companies ranging in valuation from $750,000 to $25,000,000. Contact their offices in Atlanta, GA or Charlotte, NC for a free consultation.