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”
- 28% of
brokers said within 6 months.
- 31% of
brokers said within 9 months.
- 21% of
brokers said within 12 months.
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.