If you’ve decided to move forward with selling your business, one of your first questions is likely: How long to sell my business? The short answer is: it depends. While some businesses sell in as little as a few months, others can take more than a year. Below, we break down the typical timeline, the factors that influence it, and ways to ensure a smoother, more efficient sale process.
Typical Timeline for Selling a Business
Pre-Sale Preparation (Several Days or More)
Before you list your business, gather your business records. For most people, this can be as easy as emailing tax returns from your CPA, printing Quickbooks, and answering questions that help buyers understand why they would benefit from purchasing your business. Here at Tangent Brokerage, we make these initial steps as seamless as possible. We want you to focus on running your business while we handle the rest! As long as everything is organized, this step should only take a few days.
Listing and Marketing (1–6 Months)
Once your business is ready for the spotlight, it’s time to find potential buyers. This involves creating a blind profile, which is a summary of the company that maintains confidentiality, and reaching out to prospects, such as online platforms or networks. However, hiring a business broker to assist you through each step of the process is often the better option.
Keep in mind that the length of this phase can vary widely. A company with a unique selling proposition, strong financials, and a clear growth story might attract several serious buyers quickly. In contrast, a niche business or one with declining profits may wait longer for the right buyer.
Due Diligence and Negotiation (1–3 Months)
Once you’ve identified a potential buyer, expect a flurry of document requests and in-depth analysis. This is where financial statements, contracts, and legal documents are closely examined. Also plan for site visits or interviews with key personnel and negotiations for price and terms.
Due diligence can be relatively brief if your documentation is well-organized and the buyer is experienced (or has a strong advisory team). However, it can also drag on if either party uncovers surprises—like outdated financial statements or undisclosed liabilities.
Final Closing (2 Weeks–1 Month)
After all the details are hammered out, it’s time to finalize legal agreements, such as asset purchase agreements or stock purchase agreements, transfer of ownership and funds, and transition details like training and handover. Closing typically takes a couple of weeks, but complications—such as financing delays or final legal clarifications—can stretch this period out.
Factors That Can Influence the Timeline
There are a number of factors that can influence the timeline, so it’s important to be prepared and have realistic expectations for the process:
- Industry Conditions: Hot industries often attract multiple buyers, speeding up negotiations. Conversely, if your sector is in a slump, finding a buyer may take longer.
- Business Size and Complexity: Larger companies with multiple divisions, intricate supply chains, or specialized processes typically require more thorough due diligence.
- Asking Price vs. Market Value: Setting an unrealistic price can delay your sale. Buyers will be discouraged from engaging if they sense the valuation is out of line with market norms.
- Quality of Documentation: Organized financials, updated contracts, and clear operational manuals help build buyer confidence. Missing or incomplete documents are red flags that can stall progress.
- Seller and Buyer Preparedness: Both parties’ experience can expedite or slow the process. A seasoned buyer with financing in place is more likely to close quickly.
- Economic Climate: Broader market conditions—such as interest rates, consumer confidence, and investor sentiment—can dictate how quickly deals get done.
Tips to Speed Up the Sale Process
Here at Tangent Brokerage, we’ve closed over 200 deals and valued more than 900 businesses. Here are some of our best tips for ensuring a faster sale process:
Plan Early
The decision to sell a business shouldn’t happen overnight. Ideally, many start preparing 1–2 years before listing their business. However, contacting Tangent Brokerage to assist with a preliminary evaluation will help you strategize the best methods to maximize your selling price. We assist you in refining and shoring up financials, operational inefficiencies, and enhancing your company’s overall value.
Engage Professional Help
Consider hiring a business broker, CPA, attorney, and exit advisor. Tangent Brokerage can assist you beforehand, so you have the best approach in lining up all advisors. These professionals can help you market the business effectively, gather documentation, and negotiate better terms. We also have both the Business Broker and accounting competencies in house that will help you when Due Diligence time arrives in the process.
Conduct a Mock Due Diligence
Get an internal team or external consultant to audit your financials, processes, and legal documentation before a buyer does. Fixing issues in advance makes for a smoother ride when real buyers start vetting your business.
Set Realistic Expectations
Overpricing can scare off legitimate buyers early in the process. Research comparable sales, consult valuation experts, and set a fair, defendable asking price.
Remain Flexible
Buyers may propose different deal structures, such as an earn-out or partial financing. Being open to creative solutions can expedite a sale when straightforward cash offers aren’t forthcoming.
Keep Running the Business
One of the biggest mistakes sellers make is taking their foot off the gas once they list the business. Maintaining or growing revenues and profits during the sale is crucial to preserving value and buyer interest.
When a Quick Sale May (or May Not) Be Possible
There are some situations where a quick sale may not be possible. For instance, if you want to sell a business due to financial trouble or your industry is highly specialized, finding the right buyer can be more challenging. Certain industries have seasonal buying trends, and these can struggle to sell quickly as well. If you miss the peak time of year, you may need to wait until conditions align again. Surprisingly, even highly desirable businesses can take time to sell, as you might see multiple offers in a matter of weeks that you have to review.
Final Thoughts: Sell a Business Today!
Selling a business is a process that involves many moving parts. While a transaction can wrap up in a few months under ideal conditions, expecting the entire process to take anywhere from six months to a year (or even longer) is generally wise. Proper preparation, pricing, and professional guidance are the keys to maintaining momentum and ensuring a successful sale.
At Tangent Brokerage, our sole function is selling your business, allowing us to move faster. Not only do we have extensive experience selling businesses, but also we have knowledge on the accounting side of things. With strong sales and accounting experience, we are efficient in what we do and help our clients get the best deal. To schedule a free consultation, contact us at 630-862-5234.