For many of the business owners we work for, the sale of their business is one of, if not THE most important business transaction of their lives. Selling a business involves careful planning, and a clear understanding of the process. One of the most common questions we get as brokers is: “How long will it take to sell my business”? Business owners often would like to understand the next phase in their lives and when that will happen. Whether that is retirement or moving on to another project. Here's an overview of how long it generally takes to sell a business, the role of business broker, the importance of confidentiality, and what to expect during the closing phase.
The Timeline for Selling a Business
The time it takes to sell a business can vary widely based on several factors, including the industry, size of the business, market conditions, and the complexity of the sale. One of the biggest additional factors in the timeline is how reasonable the seller is on price. Often, we talk to business owners who are not willing to sell where the market values the business, and that’s a futile exercise for everyone. For a properly priced business, on average, the process can take anywhere from six months to a year, but it's not uncommon for it to extend beyond that timeframe. So, if you think about that selling timeline, plus time for an effective and seamless training and transition period, it can be 9 months to a year in many cases before the sale and your obligation is complete. We like to say: “If you don’t want to be doing what you are doing currently one year from now, you should list your business today”!
The Role of Business Brokers
Hiring a Transworld business broker can significantly expedite the sale process. Transworld has specific industry knowledge, a large network of potential buyers, and the expertise to guide you through various stages of the sale. Our brokers can help you determine the right asking price, market your business effectively, negotiate with buyers, lead you through due diligence and help craft a fair and effective transition plan. Working with a skilled business broker can streamline the process and increase your chances of finding the right buyer within a reasonable time frame.
The Importance of Confidentiality
Confidentiality is crucial throughout the entire process of selling a business. We don’t want your employees, customers, vendors, or competitors to know the business is for sale. This could lead to the value of your business being impacted negatively. Working with a Transworld professional who understand the importance of discretion is essential to maintaining confidentiality.
The Sale Process
Once your business is on the market and Transworld is actively reaching out to find potential buyers, if the business is properly priced, you will get interested buyers. The Transworld team will field inquiries and vet buyers to make sure we are only talking to qualified and experienced prospects. Once we identify a good buying prospect, we will provide all the marketing materials, history and details about the business, financials, and answer all questions from the buyers. Only after considerable vetting and proof of the ability to buy will we connect a potential buyer with a business owner for an introductory call or visit. From there Transworld can help with offers, negotiations, due diligence, sale contracts and closing. We can also provide referrals to experienced business sale and acquisition attorneys who can assist.
At the closing, all legal documents are executed, funds are transferred, and ownership is officially transferred from the seller to the buyer. This phase can take a few weeks to a couple of months, depending on the complexity of the business and any specific conditions outlined in the purchase agreement. From there we give advice based on experience on the best way to tell employees, customers and vendors and we help create a plan for a seamless transition. We like to tell a business owner that we will be a resource for them from our initial communication through the time when they have moved on from the sale of their business to the next big thing!
In the end, selling a business is a process that requires careful consideration and the right guidance. Remember that each business sale is unique, and it's important to tailor your approach to your specific circumstances and industry. If you want to experience a smoother and successful business sale, don’t hesitate to reach out to a Transworld Business Advisor for help. We are happy to talk with you initially about the value of your business, an expected timeline, and the entire sale process.