If you’re wondering how long it will take to sell a company, the answer usually depends on many different variables.
According to a BizBuySell survey, 44 % of owners believed that the entire process would take under five months. However, many brokers say sellers should set their expectations towards six to 11 months.
If you are selling your company, you may need to take the following variables into account:
Increasing the sale price will lengthen the time it will take to sell your company and reduce the pool of financially available buyers.
Buyers who retain the financial resources to purchase large companies tend to require due diligence periods to involve any financial advisors, which will impact the selling time.
Additionally, a large company may have complex wheels in motion that will require lenders or secondary investors more time to go over the operation.
Typically, there are three main types of buyers for companies: strategic buyers, individual buyers, and private equity groups. Each set of buyers will likely impact your timeline in different ways.
This group can generally take the longest time. They may be adept in your company’s industry but may drag out the timeline due to regulatory and corporate approvals.
According to Harvard Business Review, between 70 and 90% of strategic acquisitions fail. A detailed integration plan can help you maximize your chances of a sale.
This group tends to move quickly. It’s important to note that many use small business loans (SBA) to get financing. The length of time between applying for a loan to closing on a company typically takes around 45 to 90 days.
Private equity groups mainly fall in the middle. If the company is being consolidated into a similar business that the private equity group owns, the process can be quick. However, if your company is a new platform, they may request a comprehensive spreadsheet of data.
Desirability factors in the type of demand for your company within your industry, as well as location—essential factors for buyers.
Financing is quite common as few buyers have the liquid resources to pay the total cost upfront. The number of days it can take for a loan, especially SBA loans, can depend on many factors.
If you were to take an extended leave, or even a vacation, of over a month, how smoothly could your company run without you?
If your company could run smoothly, you are in a better position to sell quickly.
Any buyer will want to be able to take up the reins with few hiccups. If relationships with your customers and vendors are built around you or if you make all the important final decisions, finding a buyer with your skills can be difficult.
By removing yourself from daily operations as often as you can, you can significantly impact your company’s value and timeline to sell.
Retaining the services of a professional mergers and acquisitions service can save you time, money, and energy. Click neumannassociates.com today to learn more about the process of selling your company.
Michael Davis is the Content Director of Miami’s On the Map Marketing, Inc. As the chief content editor of one of the fastest-growing internet marketing firms in the country, Michael has made it his mission is to provide high-level, factual, and error-free content that emphasizes the best SEO practices and helps his company’s clients convert sales. When he’s not editing SEO content for On the Map, Michael writes his own industry-specific content for various publications.