How Long Will it Take to Sell My Business?

Selling your business is a significant decision involving careful planning.  If you are considering the sale of your business, it’s important to understand how long it could take so that you can start to plan ahead. 

There is no universal rule about how long it will take to sell a business, but on average the process can take between 9-12 months.  However, the timeline depends on a myriad of factors, some of which we consider below:  

Business Type and Size: Clearly, the nature and size of your business plays a crucial role in determining how quickly it might sell. Certain industries are more attractive to a high volume of buyers, whilst those in niche sectors, remote locations or requiring very specific expertise may take longer to find the right buyer.  

Smaller businesses, especially in high-demand industries, may sell more quickly because they appeal to a broad range of buyers and a less complex business structure can mean a simpler sale process. In contrast, large businesses requiring substantial investment where corporate buyers and investors take longer to evaluate an opportunity may take longer to sell, not only due to the smaller pool of potential buyers but also the added complexities involved in the due diligence process.

Preparation: No matter the business type or industry, one of the most common reasons for delays in the business sale process is insufficient preparation. Well-prepared business owners with organised financials, clear documentation and a thorough business plan can expedite the process by reducing the time spent on negotiation and due diligence.

Market Conditions: Economic and market conditions and trends in your industry can significantly impact the number of buyers that are interested and the amount of time it takes to reach your asking price. In a stronger economy, buyers may be more willing to invest, with easier and quicker access to finance leading to speedier sales, while economic uncertainty can make potential buyers more cautious and extend the time it takes to close a deal.   

In a seller’s market, where demand for certain businesses is high and supply relatively low, sales may be quicker. Conversely, in a buyer’s market, the process may be drawn out. Economic factors, interest rates, and market stability are all contributing influences.

Marketing: The effectiveness of the marketing strategy used to advertise your business can impact how quickly it sells. A well-executed campaign can attract more buyers and expedite the sales process. This is where choosing the right advisers, for example, a business broker with expertise in your industry and a network of potential buyers, can make a huge difference. Your broker can also screen potential buyers, ensuring that only serious and qualified candidates are considered. But after the process of viewings and offers and identifying the right buyer who meets your criteria, it can still take several months to complete the deal.  Of course, the search process can vary greatly depending on the industry, business size, and location, but with specialised or large-scale businesses, the process of finding a suitable corporate buyer can extend timescales. 

Valuation: The price of your business will impact how long it takes to sell, therefore it’s important to have a thorough business appraisal to identify the appropriate price for your business, considering market conditions. You will want to price your business to meet your objectives – whether that’s the speed of sale, maximising value or ensuring the business buyer is the ‘right fit’ for you.

Negotiations: Once you’ve attracted a buyer, negotiations around price, terms of the sale, and other conditions can begin. Successful negotiations require flexibility and patience, as they can last from a few weeks to several months. Timing will vary depending on your business type but could be lengthy if multiple buyers are interested or if the purchase involves complicated deal structures.  

Due Diligence: After negotiations the due diligence process begins, where your buyer thoroughly examines business operations, financials and legal matters.  The process can take anything from a few weeks to a few months, depending on how prepared both parties were prior to the sale. Sellers who have prepared comprehensive and transparent documentation can help speed up this phase.

Legal and Regulatory: The legal and regulatory requirements involved in selling your business can also affect the timeline. In addition to the sales documentation, businesses within regulated industries may have specific licenses and paperwork that require specific approval processes.

Closing the Deal: The final step is closing the deal. This involves signing the necessary legal documents, transferring ownership, and settling any outstanding financial matters. The closing process itself can be quick but is contingent on how smoothly the prior steps have been executed.

Each of the above factors can impact on the speed of your business sale process.  While 9-12 months is a general guide, some business sales involving simple, smaller businesses in a high demand market can close in a few months, while others may take over a year. 

By taking proactive steps to plan your business sale, preparing your business and working with professional advisers who can guide you through each step, you can streamline the process and increase your chances of selling your business more quickly.