How Long Does it Take to Sell a Business? | Company Activities & Management > Company Structures & Ownership from AllBusiness.com
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How Long Does it Take to Sell a Business?

A survey of business brokers was done by one of the top business-for-sale websites, www.businessesforsale.com, and they found the following in terms of the time it takes to sell “the average” business.

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Of course, this answer depends on the complexity of the business, financing required, and some other factors.  A survey of business brokers was done by one of the top business-for-sale websites, www.businessesforsale.com, and they found the following in terms of the time it takes to sell “the average” business:


  • 28% of brokers said within 6 months.
  • 31% of brokers said within 9 months.
  • 21% of brokers said within 12 months.
  • 10.5% of brokers said that more than 12 months was required to sell a business.

That seems about right to me.  Even the ones that sell quickly seem to have some issue that makes them take a few months at least.  Here’s an example.

We basically “pre-sold” a company recently because I already was in touch with a buyer that wanted the company.  However, we still needed to do the financial analysis and valuation, which take a few weeks and in this case longer because the books were not in ideal shape.  To be fair to the seller and make sure it was a fair market value price, we put it on the market and advertised it.  But sure enough, my buyer made a decent offer and it was negotiated and accepted within a few weeks.

However this was a $5 million dollar business and my buyer didn’t have that in cash, so some serious funding was required.  Did I already mention the books were less than ideal?  I was convinced that the earnings and cash flow were there, the buyer was convinced, and the seller was living proof, with an extravagant lifestyle supported by the business.  But convincing bankers was far more difficult, and it took six full months to find a lender that would do the deal. We finally found a lender,and the buyer has a great company and the seller is now retired.

An average selling time of nine months is about right.  I tend to think of six months as a typical, straight forward sales process where the business doesn’t sit on the market too long.  Of course, if the business isn’t priced right it can sit on the market for a very long time.   It doesn’t take much time to find an overpriced business on the for-sale web sites, and some have been for sale for a couple of years or longer.

 

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