8 Easy Steps to Selling Your Business in 2023

Deciding to sell a business for any reason isn’t easy, and there are a lot of things to consider before you take the plunge. Everything from timing your sale to determining the value of your business revolves around one crucial aspect: timing.

If you’re considering selling your business, the biggest question is: how long does it take to sell a business? The fact is, that learning all the factors that can impact timing will help make the entire process much less overwhelming.

Read on to learn everything you need to know about how long it takes to sell a business and the factors that can influence the timing of your business sale.

How Long Does It Take to Sell a Business?

So, how long does it take to normally sell a business? It may come as no surprise that the answer to this question varies. Since every business sale is different, there isn’t a strict rule as to how long it should take.

In general, it can take 6 to 12 months to sell a business, but like with anything else, there are no guarantees.

How Long Does It Take to Sell a Small Business?

Selling a small business follows much the same timeline. You can expect to sell within 12 months, but in some cases, this can take well over a year.

However, it can also take less time since small business sales tend to be less complex.

How Long Does It Take to Sell a Private Company?

Private companies follow this same trajectory, but this can depend on the structure of your company. To answer this question in more detail, let’s dive further into the factors that make this timeline what it is.

Why Does It Take So Long to Sell a Business?

There are various reasons it can take time to sell your business. It’s essential to remember that the length of time doesn’t just have to do with buyers either.

Let’s look at the most common factors:

Sales Price

First, if your business comes with a higher sales price, it can naturally take you longer to sell. This is simply because you’ll have fewer qualified buyers who have the funds to afford the investment.

Types of Buyers

The sales timeline is affected by the different types of buyers you’ll encounter. These buyers include:

Individual Buyers

Individual buyers are the most common and will usually need to apply for financing. If they’re applying for a small business loan, it can take anywhere from 40 to 90 days to get approval.

This timeline can vary, depending on the type of loans and financing the individual borrower needs. Despite this, individual buyers are usually the fastest route when it comes to selling your business.

Private Equity Groups

Private Equity Groups (PEGs) are usually teams of buyers who will thoroughly assess your business before making any moves.

They’re knowledgeable and you’ll likely face many questions about your business. This usually leads to a longer waiting period, but they can usually obtain financing much quicker.

Strategic Buyers

Strategic buyers typically own businesses in the same industry. They’re looking to add a business to complement their existing business and increase their market reach.

You can expect strategic buyers to know a lot about the industry, but the buying process may take longer. This is because they need time to integrate all the moving parts to create long-term value.

Your Business Industry

Your business industry can play a key role in the timeline of the sale. For example, if you have a business that requires specific licensing, it can impact how long the process takes.

Businesses that involve healthcare support and services may take longer simply due to the buyer needing to get various aspects to line up.

In addition, profitable industries like online retail businesses usually sell quickly as the process is much easier. It’s not as difficult for the new buyer to take over operations without any major disruptions.

On the other hand, if you have strategic buyers or private equity groups interested in your business, they may already have the proper licensing and tools in place.

Your Business Location

They say location is everything when it comes to real estate and the same saying rings true for selling a business.

While your business industry has a huge impact, the location it’s in can seal the deal. If your business is in an up-and-coming, fast-growing city, you’ll generally have more buyers knocking at your door. This is because of the higher possibility for organic growth to occur in the near future.

You may also have potential buyers who are considering moving to your location, which may lengthen the time, depending on how they’re navigating their own processes.

Stiff Market Competition

Facing stiff market competition is one of the many unwelcome surprises business owners can face when trying to sell.

Sure, you can easily say “It’s time to sell my business” and think it will just happen, but having a business marketing plan is vital. All marketing plans begin with understanding who your competitors are.

Remember, competition isn’t just another business in your industry. It can be services or products that are hitting the market full speed ahead, and you have yet to sink your teeth into them.

Business Readiness

Finally, your business has to be ready to sell, which can be the trickiest thing about launching your business sale off the ground.

You have to be honest and ask yourself if you’re truly ready to sell. Remember, not having everything in order will make the process take much longer.

Is It Easy to Sell a Business?

The most difficult part of selling a business is the actual process of selling a business. This is because this process involves a lot of preparation on your part.

To make selling a business easier, you’ll need to take steps like:

Ensure Your Finances Are in Order

How your business performs is one of the first things potential buyers will evaluate when they’re looking to purchase a business.

Getting a good handle on your business finances makes your company more stable overall, which makes it a better investment for someone else. You’ll need to be able to show a clear picture of your financial health.

This includes business expenses, taxes, and costs of goods. It’s best to prepare at least two years of documentation that paints a clear picture.

Although this may seem like a heavy task, there are easy ways you can streamline this process. These include forming a strict budget, organizing finances using online accounting platforms, and staying on top of billing.

Get a Business Valuation

A business valuation determines the worth of your business and is an essential step to take so you don’t price your business too low, too high, or have unrealistic expectations. Pricing your business right will cut down the length of time it takes to sell.

A valuation can involve various approaches. First, an asset-based approach is one of the most common methods to value companies. It focuses on your business’s net asset value or fair market value of your total assets.

Another common approach is the market approach, which involves comparing your business to comparable companies that have sold within specific time frames.

Finally, an income approach reviews historical financial performance data and creates a projection of expected future earnings.

Each approach has different benefits, and finding a local business broker like Gulfstream Mergers & Acquisitions will allow you to get the most out of this process.

Find a Business Broker

A business broker is a company or individual that can assist with the selling and purchasing of businesses.

Since business brokers know the tax and legal implications of business sales, they can help you save on costs and reduce the risk of problems in the long run.

Business brokers can also find suitable companies or individuals to buy your company, which increases the chances of selling quickly.

Since all businesses are unique, you’ll need a custom plan that begins with an initial consultation. This involves determining what drives value to your business, as well as a financial overview.

You’ll also get to discuss your motivations for selling and choose how involved you want to be in the selling process. Business brokers will also help with marketing management, taking the stress out of your hands.

Ultimately, finding a business broker not only decreases the time it takes to sell but also makes it much easier for you as a business owner.

Sell Your Business With Confidence

Now that you know the answer to the question, “How long does it take to sell a business,” you’ll better understand how to navigate this process.

Remember, you don’t need to go through this process alone. Finding the right professional business brokerage firm can make all the difference.

Gulfstream Mergers & Acquisitions consists of a team of highly skilled business brokers with years of experience in assisting business owners with selling, buying, and financing businesses. We can also assist with business valuations and exit planning.

Our main office is in Cornelius, NC and we also have offices in Miami, Atlanta, Boston, and Philadelphia.

Make sure to contact us today to see how we can help you sell your business with confidence.