How long does it take to sell a business? The typical time frame is 6 to 9 months, but where you fall in that range depends on a number of factors. Below are the five main variables that influence the length of the sales process.
#1) Broker vs. DIY
The business selling process is complex. Obtaining the services of a professional rather than going it alone is likely the greatest influence on how long the sales process will take. Using a business broker is the best way to navigate the process as quickly as possible and get the best possible price for your business. Meeting with a business broker early in the process can help an owner avoid common missteps, provide insight regarding company financials, and estimate a timeline for the valuation and listing process.
#2) Marketing
This is the period of time where the owner (or the business broker, if one has been secured) markets the business to prospective buyers. This can be an overwhelming part of the process for an owner, especially when confidentiality is a priority. At Viking Mergers & Acquisitions, we place the highest priority on protecting the identity of a company while presenting the business profile listing to our large database of pre-screened buyers, as well as a variety of other marketing sites.
#3) Industry
The time it takes to find a buyer depends partly on access to a vetted buyer pool, but also depends greatly on the business’s particular industry. For example, the demand for IT businesses and MSPs is very high, so these companies tend to sell much more quickly than many other industries, particularly those in a more niche market.
#4) Location
The location of a business also influences the speed and amount of buyer interest, as the draw of a growing, desirable city adds to the attractiveness of the businesses listed there.
#5) Due Diligence & Closing
Once an “Offer for Purchase” has been made by a buyer and negotiations are complete, the due diligence period begins. Typically, this period alone can take anywhere from two to six weeks while the buyer reviews detailed financial statements, contracts, copies of leases, etc. Again, the experienced guidance of a business broker can help speed up the process and can also eliminate the chaos many owners experience during this phase. At Viking, on average, we find 60-75 days to be the typical time frame from acceptance to closing (when funds are received), which includes the due diligence phase, pre-closing, and the closing itself.
If you are thinking of selling your business, we can provide an estimation of what your business would likely sell for and how long it might take to complete the transaction. Contact us today for a no-cost consultation.