Owning a business is often one of the most fulfilling pursuits that someone can take part in. After all, there’s a reason that becoming an entrepreneur is associated with freedom.
But, it’s also not uncommon for there to come a day when selling your company is the most logical step. Not sure how long it might take to do so? Don’t worry, we’ve got you covered.
Let’s take a look at everything you need to know about the factors that determine how long it takes to sell a business.
As you may expect, one of the most important factors that determine the speed of your sale is the price that you’re asking for.
To elaborate, this involves how your asking price relates to the market value of your business. If you want to get as much money out of your company as possible and list your company at a higher value than what it would typically be worth, you may find that the sale takes a long time to complete.
If you’re looking to close a deal as quickly as possible, though, you may need to lower your price substantially.
Your Company’s Structure
Larger, more complex businesses will take longer to sell on average than smaller, more straightforward companies. This is simply due to the fact that there are fewer individuals capable of successfully taking over a business with a more convoluted structure.
For example, an entrepreneur who is looking to sell a small clothing brand may not have any issues. The owner of a machine part fabrication company, however, it’s likely to have a more difficult time finding a buyer.
How Desirable Your Business Is
In some cases, your business may not be desirable to most buyers. This is particularly true if your company has not been performing well recently, as whoever buys your business will take upon this liability even if they have a concrete plan to make the necessary changes.
Similarly, your business (for whatever reason) may be unable to keep up with its local industry competitors.
Your Intended Buyer
There are three major types of buyers:
- Strategic buyers
- Individual buyers
- Private equity groups
In general, strategic buyers tend to take the most time before they close the sale. This is due to how diligent their research is, extensively mapping out potential outcomes, etc. On the other hand, individual buyers tend to complete the sale the fastest.
These are typically individuals who see an opportunity in your company and wish to make the jump immediately.
Private equity groups fall somewhere in between those other parties. But, you can expect the transaction to move quickly if they are acquiring your company in order to consolidate it with another company they own.
Fortunately, there are professionals out there (such as technology business brokers) who specialize in helping others sell their companies.
Also, check this site to find the best business brokers in NYC.
So, How Long Does It Take to Sell a Business?
If you’re working with an individual buyer, it’s not impossible to sell your company in less than six weeks. But, the above factors could cause the sale to take over 12 months in certain cases.
With the above information about how long you can expect it to take to sell a business in mind, you’ll be well on your way toward completing the process as quickly as possible in your scenario.
Want to learn more tips that can help you out in the future? Be sure to check out the rest of our blog.