As a business owner, selling your company can be an overwhelming task. Understanding the timeline to sell your business can reduce your stress. The process includes making multiple decisions and hiring professionals at appropriate times.
Remember, the business selling process begins long before you actually go on the market. You should prepare your business for sale, to get the best deal possible.
Generally, with proper advance planning, a correctly priced business will typically sell in 4 to 6 months. However, the timeline to sell a business depends on various factors, which we will discuss in the post.
Factors affecting the timeline of selling a business.
Type of business
Some business types are more attractive to buyers than others. You should find out market trends and analyze the interests of prospective buyers. If your business falls in the category that interests buyers, then the sales process will complete significantly faster.
Buyers often look at indicators, such as revenue growth metrics, customer base, customer concentration, recurring revenue, market positioning, scalability, and positioning of the business. It’s important for you to understand buyers’ demographics and preferences.
Size of the business
After the business type, its size matters in the sales process. If the company is large, with many employees and hierarchies, it takes a longer time to sell partly because the buyer pool is smaller. It’s a numbers game: for instance, there are more buyers who have $500,000 cash than there are buyers with $10,000,000 cash on hand. The entire sales duration extends. Similarly, the due diligence process will be longer with businesses that are selling for $10,000,000+ price; they will likely perform a Q of E (Quality of Earnings) which will normally take 45-90 days.
On the other hand, a small company with fewer employees faces fewer sales issues as the business, generally, will operate in a simpler manner without documented processes and procedures. Buyers might not be convinced to buy a business with fewer employees.
Market conditions
Most buyers purchase businesses through financing. They take a loan or look for investors to complete the transaction. The interest rates for financing are often affected by market conditions, which depend on different factors.
Your business will sell faster if the interest rates are low as buyers will not have any financial burden and they will be ready for investment. You should understand the macro and regional economic factors and find out if the market conditions are feasible for your specific industry, size and type.
Preparedness of the seller
A business sells faster if the seller is prepared. The business sales process includes several steps and paperwork. The business should be free from all legal issues and formalities. If not, mitigation plans need to be in place with full disclosure to potential purchasers.
If you know all the steps and are prepared to sell your business with all the supporting documents, the process will be smoother and you will negotiate from a position of strength and confidence. Every step of the sales process will be completed on time. One area you might need professional assistance could be for preparation of a formal independent, third party company valuation.
Buyer readiness
If you are prepared but your buyers are not ready, the sales process will take time. Sometimes, buyers accept and finalize the deal, but it doesn’t close on time. There can be multiple reasons for this.
One of those reasons is the readiness of the buyers. Buyers face challenges in securing financing, and thus, they delay the closing. This extends the overall sales time of the business. Engaging an M&A advisor to prescreen prospective buyers will reduce this risk.
In Conclusion
There is no standard time to sell your business. The timeline varies depending on various factors, including those discussed above. So, if you are planning to sell your business, consider these factors to set the timeline. Setting up a timeline will prevent any hassles in the sales process.
At Adam Noble Group, we are experienced M&A Advisors and business brokers who know how to sell your business and get you the biggest paycheck of your life!.
NOTE: The sale of a business is confidential and discreet; PLEASE DO NOT VISIT THE BUSINESS OR SPEAK WITH ANY EMPLOYEES. We know about many businesses that are for sale but might not be advertised. Check out www.adamnoble.com for more information and consider registering your criteria as a purchaser.
ALL STATEMENTS, FIGURES, AND VALUES ARE SUBJECT TO A PROSPECTIVE PURCHASER’S DUE DILIGENCE. THE INFORMATION FURNISHED BY M&A ADVISOR ABOUT THE BUSINESS AND ITS FINANCIALS HAS BEEN PREPARED BY OR IS BASED UPON REPRESENTATIONS AND INFORMATION SUPPLIED BY THE SELLER. ADVISOR HAS MADE NO INDEPENDENT INVESTIGATION OR VERIFICATION OF SAID INFORMATION.
For information, reference Texas Renovation-Rehab Multifamily Construction Services Business for Sale Business for Sale 20456 and contact Jeff Adam, PE, MCBC, FRC, CBB at Adam Noble Group, LLC
Phone: (817) 467-2161
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For 3 decades, we have been guiding business owners and their families CONFIDENTIALLY to exit their construction trade business with the BIGGEST paycheck of their life!
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During 3 decades of M&A service, Jeff Adam has successfully completed the sale of over 825 businesses and advised or completed 1,000’s of business valuations and exit plans. An entrepreneur in his own right, Jeff has started and grown 12 companies in fields including international finance, B2B services, business valuation, construction, screen printing, Mergers & Acquisitions, engineering, and manufacturing. Jeff has donated his time as a distinguished speaker at numerous national & international conferences since 1977 covering topics such as environmental services, engineering, media, craft breweries, exit planning, business valuation, charitable giving, management, business brokerage and M&A fields.
Jeff is President of Adam Noble Group, LLC, a national M&A Advisory firm, professionally valuing and confidentially selling profitable businesses owned by exit-motivated business owners to qualified strategic, corporate, private equity, partners, management, and first-time buyers. Jeff establishes rapport, builds trust, and educates business owners in the steps to meet their goals as they prepare and achieve the discreet, confidential exit of their business. Jeff exclusively represents sellers of $1M-50M value enterprises and endeavors to transfer their businesses to qualified, capable acquirers who will build upon the seller’s vision, goals, culture, and history. Jeff maintains lifelong repeat and referral relationships with sellers, their acquirers, and service providers.
Adam Noble Group has multiple M&A and business broker specialties: Manufacturing, Defense Industry, Oilfield services, Construction trades, Craft Breweries, Partnership Buyouts, Manufacturing, Service, and Wholesale Distributors.
Our M&A advisors and business brokers are all multi-industry entrepreneurs who have successfully exited their own companies. Jeff has walked in your shoes! Jeff wants to put the BIGGEST CHECK of your life in your pocket! Please contact Jeff, and he will confidentially answer all your questions.
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