How Long Does it Take to Sell a Business?

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.