How Long Does it Take to Sell a Company?

On average, it takes about eight to ten months to complete the whole process of selling a company. With this figure experiencing a year-over-year increase, one might ask why it takes so long to sell a business.

The answer is negotiating the price and terms. Firstly, a price is obviously a very important factor due to the fact that overpricing the business at the beginning of the sale process may discourage many otherwise interested potential buyers. A business that is priced appropriately will be able to sell much quicker than an expensive one. Moreover, a reasonable down payment and seller’s financing will be able to reduce the time even more. Secondly, as mentioned in other articles, being prepared for what the buyer might want to know also helps significantly.

A seller interested in a quick sale of their business should, therefore, consider and prepare the following information:

  • Copies of the financials for the past three years
  • Copies of the lease and any assignments of the lease from previous sales
  • Specify what equipment/fixtures will be included in the sale. Ideally, items not included in the sale should be removed from the premises prior to the selling process or be boldly marked as not for sale.
  • Copies of franchise, supplier or vendor agreements
  • Supporting documents for patents, copyrights, trademarks etc.
  • Marketing material, such as advertisement, press release or other sales material

Furthermore, below are some more questions buyers might want to ask:

  • Will the seller train the new owner at no extra charge?
  • Are there any local restrictions that would impact the business?
  • Is there any pending litigation?
  • Are any license issues involved?
  • What about the employee situation? Are the any key employees?
  • Are there any copyrights, secret recipes, mailing lists etc.?

A prepared seller will more likely impress a potential buyer than an unprepared one and is on a good way to reduce the time it takes to sell a business.

In addition to own preparation, using a professional business broker can likewise significantly reduce the overall time. Sellers utilising brokers will be able to take advantage of their professional contacts and expertise and, as a result, they will save time and gain peace of mind.