The best answer to how long it takes a business to sell is “it depends.” Every business is different, and you will also get different answers from people who act as your advisors. Some may suggest caution to move slowly, while those in the real estate field may suggest a quicker sale to encourage you to take the plunge.
The best way to sell your business is to partner with an experienced firm like Hallmark Business Brokers. We are in the business of bringing business buyers and sellers together and providing a seamless transition between owners. We can provide more detailed analysis of your business sale once we have met with you, but there are several steps to any business sale that are summarized below.
Step One — Find an Experienced Broker (less than a month)
We hope you have already done that by partnering with Hallmark Business Brokers. Don’t go it alone if you are trying to sell your business. There are many unseen issues which can either disrupt the sale or cost you a lot of money.
Step Two — Evaluate Your Business (1-2 weeks)
This is when you tell us what you believe your business is worth and together we evaluate the current business sale environment. We will perform a detailed analysis of your business and can advise if your expectations are realistic. If your expectations are higher than our estimated value, we can help you determine ways to raise the value of your business prior to any future sale.
Step Three — Preparing for Sale (1-2 months)
This step is when Hallmark Business Brokers prepares the needed documentation for your business sale and develops a list of potential buyers. We expect buyers to sign confidentiality agreements with you to protect your business while the two parties discuss details. The seller needs to be available to answer questions and review documents, but their primary task is to keep their business running successfully during this time. It is critical at this point to have an experienced broker to bring you qualified buyers, rather than watching your business languish from a lack of prospects if you try to sell the business yourself.
Step Four — Marketing Your Business (4 months or less)
This is where we market your business. How long it takes will depend on the type of business you are selling, whether we have potential buyers already looking for your business type, market conditions at the time, and so forth. If the business market is strong, a buyer might be found rather quickly, while in a recession it will take longer. Our job during this time is to find buyers, discuss your business opportunity in general terms, and secure confidentiality agreements prior to more specific discussions.
Step Five — It’s Time to Negotiate (less than a month)
Negotiations will begin when one or more serious buyers are found. A motivated buyer and a good price point set by the seller can make this process happen more quickly. Every sale is different, so be patient. Also, sellers and their employees need to be alert to the fact that buyers will be touring the business and looking at specifics, so everyone needs to offer positive feedback to any questions or discussions about the business. Don’t guess when asked specifics about your business, offer to find out and get back to the buyers. They want accurate information, not instant gratification.
Step Six — Finally, a Closing (usually 2-3 months)
When Hallmark Business Brokers has a serious buyer, we will obtain a letter of intent to purchase your business. During closing, the buyers are looking for specific items that could kill the sale including labor violations, accounting errors, or other legal or compliance problems. A business owner trying to sell should look very carefully at their business from a legal and governmental compliance standpoint and clear up these issues long before this point. However, if they are found, be prepared to carefully and diligently resolve them.
Business sales are complex issues with many pitfalls that can derail an owner trying to sell on their own. Take advantage of the expertise offered by Hallmark Business Brokers and let us be your advocate when you are ready to sell your business.