Selling your business can be a confusing and difficult process and based on several factors the timeline to sell can vary greatly. We want to prepare you ahead of time so that your sale can happen in the fastest timeline with the best price for your business.

Factors That Affect the Length of a Sale

Have a look at the factors below that affect the time it takes to sell your business.

• Price Expectations: If the seller asks for a reasonable price, it will attract buyers quicker. If a price is to high the business can stay in the market longer and possible never sell.
• Location: Businesses in popular or growing areas are more appealing to the buyers.
• Payment Options: Being open to different payment methods makes it easy for buyers.
• Industry: Businesses in booming industries get snatched up fast.
• Advertising: Good marketing is essential to find a buyer quickly.
• Finances: A business with increasing profits and sales is more attractive.
• Readiness: Sellers who have all their documents and answers ready will speed up the process.
• Interested Buyers: The quantity of buyers changes with every industry. Also, the higher the prices reduces the number of buyers.

Essentially, a well priced, well located, financially sound business in a good industry, marketed effectively by a prepared seller will attract more buyers and sell my business faster. Flexibility in payment also helps.

A Timeline for Selling a Business

Check out the steps below to sell my business and the prescribed timeline for each:

• Getting Ready (1 to 6 months): Discuss exiting with your accountant, collecting all the information needed for a sale, make any needed financial reporting changes
• Build Your Exit Team (1-2 weeks after “Getting Ready”): Interview Business Brokers & Business Attorneys. Review their process costs/commissions and history for success.
• Valuation (3-14 days after hiring a broker): Business Broker prepares a valuation and “Go To Market Price”
• Create CIM  & Business Profile(1-4 weeks after “Valuation”): Business Broker creates a detailed sales document Confidential Information Memorandum(CIM). Broker creates a secure Dataroom where all your financial information will be stored for buyers to review.
• Market Listing  (1-2 weeks after all information is collected): Your business will be advertised on listing services and target buyers. The Broker will collect and validate potential buyers to ones that are qualified to purchase your business.
• Letter Of Intent (1 month to 1 year): The buyer checks your business details (due diligence), after several meetings a Letter of Intent is expected which will provide the guidelines on how the deal moves forward.
• Closing (1-6 months after LOI): In between the closing and the LOI there are several steps or contingencies met like: the “Sales Agreement” will be agreed upon, there may be negotiations with a landlord, inspections by regulatory or local officials, funding may need to be secured, further financial or operational due diligences.

How to Sell Your Business Faster?

Go through the tips below to learn how to sell your business as soon as possible.

Know Your Worth: Get your business valued by an expert like Business Broker/M&A advisor. They can also tell you how to make your business quite appealing to buyers and boost its value.

Plan Your Exit Strategy: Work with an advisor to create a plan that addresses any potential concerns or risks that a buyer might see in your business. Fixing these beforehand makes your business more attractive.

Get Ready for Inspection: Be prepared for buyers to thoroughly examine your business (due diligence). You can speed things up by:

• Putting all important documents in one secure online place (virtual data room).
• Hiring a firm to check your earnings and financials (Quality of Earnings analysis). This will help you find and fix any issues before a buyer does.

Understand Deal Structures: Learn about common ways deals are structured like how payments are made. This will help you know what kind of offers you are willing to accept and makes negotiations smoother.

Things that make your business more valuable will have a positive impact on the duration it takes to sell.

Can I Sell My Business Without a Broker?

Many business owners want to save money by not using a business broker who typically charges a 10% commission. However, selling your business yourself can be risky and might end up costing you more. And if not done with proper confidential steps may cause you to lose staff or business sales.

What Does it Cost to Sell a Small Business?

If a business broker helps you sell your small business, they usually take about 10% to 12% of the selling price as their fee with the percent scaling down as the price goes over multi-millions. You might also have to pay for a lawyer, fixing up the business to make it look good to buyers. In addition, there could be extra costs if you are transferring a lease to the new owner or bringing a business or equipment up to code based on new regulations.

Conclusion

Selling your business can be tough and emotional but a good reason or a strong market can make it easier. Getting help from a business broker is also a smart move that you can take. You can find free advice from groups like SCORE and workshops from your local Chamber of Commerce. These resources can guide you through the process. Even though selling takes time and effort, the reward of a large sum of money and more free time can make it all worthwhile in the end. Just remember to plan carefully and seek support when you need it.