How Long Does It Take to Sell a Business?

Selling a business usually takes 6 to 12 months, though it can extend beyond a year depending on factors like business size, complexity, and market conditions. The process involves multiple stages, including preparation, marketing, buyer engagement, due diligence, and closing. Here’s a quick breakdown:

• Preparation: 1–2 months to organize financials, resolve issues, and create sales materials.
• Marketing: 1–2 months to attract and confidentially engage buyers.
• Buyer Engagement: 2–3 months of negotiations and initial due diligence.
• Final Due Diligence: 1–2 months for buyer verification and financing arrangements.
• Closing: Around 1 month for legal documentation and ownership transfer.

Factors like proper documentation, realistic pricing, and professional advisors can shorten the timeline, while unpreparedness or economic uncertainty can cause delays. For best results, start planning 18–24 months before listing your business.

From Listing to Closing: A Realistic Timeline for Selling Your Business | How to Sell a Business

Average Timeline for Selling a Lower Mid-Market Business in the U.S.

In the U.S., selling a lower mid-market business usually takes six to twelve months from start to finish [6]. This timeline accounts for the complexities involved in transferring ownership and the careful vetting process by all parties. Generally, the breakdown looks like this: preparation takes one to two months, finding a buyer takes three to six months, and negotiations and closing require another two to three months [6].

Barbara Taylor, Co-founder of Allan Taylor, explains, "If your business is ready to sell, it typically takes about a year from preparation to closing. If your business is not prepared to sell, there may be additional time involved to get to the point of sellability" [7].

For businesses opting for a full auction process, the timeline is typically 6–10 months [2].

What Affects the Timeline

Several factors can speed up or slow down the sale of a business. Size and complexity are major contributors - smaller, simpler businesses tend to sell faster than larger, more intricate ones [6]. Market conditions and the overall economy also play a big role. For instance, the federal funds rate was cut to 0.25% in March 2020, sparking a surge in mergers and acquisitions (M&A) activity that peaked in 2021. However, when rates increased to 5.00%-5.25% in May 2023, the M&A market became more cautious. By mid-2024, with rates at 4.8% and potential cuts on the horizon, M&A activity is expected to pick up again [8].

Other factors, like industry trends and sector-specific challenges, can also impact the timeline. Businesses in fast-moving sectors with frequent technological changes or regulatory updates may face longer due diligence periods. Owner readiness is another critical factor - being unprepared can lead to delays [6]. Lastly, buyer financing availability, which is tied to broader economic cycles, can influence how quickly negotiations and closing progress [6].

These variables play a role in shaping the timeline for each stage of the sale process.

Main Stages in the Sale Process

The sale process typically unfolds in five key stages, each influenced by the factors mentioned above:

• Preparation (1–2 months): This phase involves gathering financial records, obtaining professional valuations, and creating detailed sales materials to present your business in the best light.
• Marketing (1–2 months): Listing your business and reaching out to targeted buyers to generate interest and attract qualified candidates.
• Buyer Engagement (2–3 months): Meeting potential buyers, negotiating preliminary terms, and managing initial due diligence.
• Final Due Diligence (1–2 months): The chosen buyer conducts a thorough review of financials and operations while arranging financing.
• Closing (1 month): Final negotiations, legal documentation, and the official transfer of ownership are completed.

The method you choose to sell your business also affects the timeline. For instance, selling independently (For Sale By Owner or FSBO) typically takes 9–12 months, while working with a broker can shorten that to 6–9 months [6].

Step-by-Step Guide to the Business Sale Process

Navigating the business sale process can feel overwhelming, but breaking it into clear stages makes the journey much more manageable. Let’s walk through the key phases and how to approach them effectively.

1. Business Valuation and Preparation

Preparation is the cornerstone of a successful sale. While the active prep work may take 1–2 months, strategic planning should ideally start 18–24 months in advance. According to industry research, only about 25% of businesses that approach investment bankers are adequately prepared for sale [13].

"Successful exits require a 'clean house' strategy starting 18 to 24 months before going to market. Professional preparation often yields higher valuations." – Sidharth Ramsinghaney, Director of Strategy and Operations at Twilio [9].

Start by obtaining a professional valuation to determine your company’s worth and identify areas for improvement. Financial transparency is crucial, so ensure your records comply with GAAP standards. Buyers will scrutinize these documents, so having everything in order is essential.

Gather key documents like financial statements, tax returns, contracts, and operational procedures. Address any lingering tax issues, as unresolved problems can significantly lower the deal's value. Pay special attention to customer concentration risks - if more than 20% of your revenue comes from a single customer, it could reduce your business's value by 40–50% [12]. Diversify your customer base well before listing your business.

Engage professionals early in the process, including an investment banker, CPA, tax advisor, and attorney. As Daren Mesrobian, Advisory Partner, points out:

"Most businesses have accounting firms and legal counsel in place, but they may not have the depth of knowledge and understanding of market terms that an M&A specialist would in their respective field" [11].

Once your valuation and documents are ready, you can move on to confidentially marketing your business and identifying potential buyers.

2. Marketing and Finding Potential Buyers

With preparation complete, the next step is marketing your business - but confidentiality is key. A well-thought-out, targeted approach ensures your operations and employee morale remain intact while you find the right buyer.

Start by creating a compelling company profile that showcases your business’s strengths, growth potential, and competitive edge. Normalize EBITDA with clear add-backs and include detailed customer retention analytics to highlight your growth strategies.

When reaching out to potential buyers, focus on those who align with your business. These could include competitors, suppliers, customers, private equity firms, or individual investors. Keep in mind that most buyers - around 80% - already have a list of vendors in mind before they begin their search, and 93% will ultimately choose from that initial list [14].

To protect sensitive information, use non-disclosure agreements (NDAs) before sharing any details. Experienced business brokers, who typically charge 5–10% of the total sale price [10], can help you tap into their networks to find qualified buyers.

3. Negotiation and Due Diligence

Negotiation and due diligence are among the most intricate phases of the sale process. Negotiations often begin with a letter of intent (LOI), which outlines the buyer's preliminary offer, including price, terms, and deal structure.

During due diligence, buyers will verify your business information, assess risks, and evaluate operations. Appoint a single point of contact for all buyer communications to streamline the process. Assemble a team of advisors - attorneys, accountants, and HR professionals - to address the various aspects of the investigation.

Transparency is critical. Provide clear and thorough responses to minimize additional information requests. As one expert explains:

"If buyers discover problems during due diligence, they'll either renegotiate the deal, reduce the price, or walk away entirely. Getting ahead of issues is key" [11].

Carefully review document requests and maintain detailed records of what you provide. This not only prevents unnecessary repetitions but also protects sensitive data.

4. Closing the Transaction

The final stage is closing the deal, which involves completing legal documentation and transferring ownership. Collaborate closely with your attorney to finalize the purchase agreement. This document will detail the terms of the sale, representations, warranties, and any post-closing responsibilities. Legal fees for this phase typically range from $500 to $3,000 [10].

Coordinate the transfer of assets, including licenses, permits, contracts, and intellectual property. Ensure all regulatory requirements are met, and confirm the buyer has secured the necessary financing. In many cases, a transition period is part of the agreement, allowing you to assist the new owner with the handover to ensure smooth operations.

Once all closing documents are signed, ownership is officially transferred. Keep copies of all documents and set up escrow arrangements to protect both parties and ensure the process concludes securely.

How to Speed Up the Sale Process

Selling a business can be a lengthy process, but with thoughtful preparation and smart choices, you can significantly cut down the timeline while still achieving a successful outcome. Here's how you can work efficiently without skipping essential steps.

Organizing Preparation and Documentation

Start preparing your documentation 18–24 months before listing your business. This early start gives you time to address potential issues without the added stress of an active sale. It’s a proactive way to avoid costly mistakes related to taxes or incomplete documentation.

Gather at least three years of financial records. Buyers will expect detailed, accurate financials, so being prepared can prevent delays during due diligence. Focus on creating financial statements that comply with GAAP standards. Include normalized EBITDA calculations and data on customer retention. If your current financials don’t meet GAAP standards, work with an accountant to restate them before initiating the sale process. [15]

Prepare multi-year forecasts and key performance indicators (KPIs). These documents give buyers a clear picture of your business’s growth potential and stability, making it easier for them to evaluate your company and move forward with confidence.

Resolve any tax compliance issues as soon as possible. Even minor tax discrepancies can cause significant delays or even derail a deal. Review your company’s tax history thoroughly and correct any issues before putting your business on the market.

By organizing your documentation and addressing potential roadblocks ahead of time, you’ll create a smoother, faster path to completing your sale.

Working with Professional Services

Once your internal documentation is ready, bringing in professional expertise can further streamline the process. Hire experienced business brokers early on. Brokers have access to networks of pre-screened buyers and investors, which can increase your business’s visibility and even spark competition among potential buyers. [16]

Brokers also handle the complexities of negotiations, confidentiality, and coordination with other professionals - like attorneys, accountants, and escrow agents - so you can stay focused on running your business. [16]

Use professional valuation and negotiation expertise. Brokers can price your business accurately to attract serious buyers while avoiding the pitfalls of overpricing or undervaluing. Their negotiation skills help structure deals that keep the process moving forward. [16]

Weigh the cost of hiring professionals against the benefits. Broker commissions typically range from 5% to 15%. While this may seem high, their ability to expedite the sale and secure better terms often justifies the cost. For high-value transactions, M&A advisors can provide advanced financial analysis, though they may charge upfront fees. [17]

Choose professionals with industry-specific experience. Look for advisors who have a strong understanding of your business’s size and sector. They should also have solid marketing plans and excellent communication skills to keep things running smoothly. [17]

The right professionals can help maintain momentum and ensure negotiations progress efficiently.

Targeted Buyer Outreach Methods

With your documentation in order and a team of professionals on board, the next step is to focus on targeted buyer outreach to avoid unnecessary delays. Develop a strategic approach to identifying buyers. Instead of reaching out to just anyone, prioritize buyers who are a good fit for your business, have an active interest in acquisitions, and possess the financial capacity to close the deal. [20]

Segment your buyers and tailor your messaging. Different buyer types - such as competitors, private equity firms, or individual investors - have unique goals and decision-making processes. Customize your communication to address their specific needs and concerns. [18]

Use multi-touch campaigns to connect with prospects. Research shows it takes about eight touchpoints to secure a meeting with a new buyer. Combining methods like email, phone calls, social media, and direct mail can help you maximize your reach. [21]

Focus on delivering value in your communication. Studies indicate that 64% of buyers appreciate innovative insights, and 96% are influenced by the value you provide. Highlighting what sets your business apart can make a strong impression. [21]

Target buyers who are actively searching for acquisitions. In-market prospects tend to move through the decision-making process more quickly, making them ideal candidates for a fast sale. [18]

Leverage your professional network for referrals. Networking can open doors to warm introductions. Since 72% of people share their experiences with six or more others, tapping into your connections can lead to qualified buyers. [19]

Personalize your outreach. Tailor your messages to resonate on a personal level, include clear calls to action, and provide valuable insights to establish trust right from the start. [21]

A focused, personalized outreach strategy ensures you’re engaging with serious buyers who are ready to move forward quickly.

Tools and Resources for Managing the Sale Timeline

Once you've laid the groundwork for selling your business, having the right tools at your disposal can make navigating the timeline much smoother. Staying organized with deadlines and documentation can simplify even the most complex transactions.

Tracking Progress with Checklists and Timeline Charts

Checklists are like your personal guide through the business sale process. They help break down overwhelming tasks into smaller, manageable steps, ensuring nothing gets overlooked. In fact, research shows that businesses with well-organized financial records sell up to 30% faster, and being prepared can cut the closing time in half[23].

To stay on track, create stage-specific checklists. For instance:

• Pre-sale tasks like compiling financial and legal documents.
• Marketing efforts, buyer negotiations, and finalizing closing paperwork.

Set clear deadlines for each task, using a format such as MM/DD/YYYY to align with U.S. business standards. Tools like DealRoom can be a game-changer here. They offer a due diligence template specifically designed for business sales, organizing requests across key areas like finance, HR, marketing, and legal. Plus, it integrates with a diligence tracker to centralize everything in one place[22].

Timeline charts are another great tool, offering a visual way to track milestones. For example, you might set goals like completing your valuation by month two, starting buyer outreach in months three to four, and aiming to close the deal between months six and nine. For more complex transactions, consider M&A lifecycle management software. These platforms make it easier to share documents, monitor buyer interactions, and maintain confidentiality throughout the process.

"Successful transactions require professional preparation, transparent documentation, and structured transition planning. The days of handshake deals based on simple multiples are long gone."– Sidharth Ramsinghaney, Director of Strategy and Operations at Twilio[9]

Using these tools not only keeps you organized but also helps you set realistic expectations for the entire process.

Setting Realistic Expectations

Clear milestones are essential, but so is setting realistic expectations for how long the process will take. On average, selling a smaller business takes at least six months, with most deals falling in the six-to-nine-month range. In some cases, particularly when buyers need extensive financing or due diligence becomes more detailed, it can stretch to a year or more[5].

To prepare effectively, start early - ideally 18 months before listing your business. This gives you time to fine-tune operations, improve financial performance, and position your business to attract serious buyers[24].

It’s also important to factor in current market conditions. As M&A advisor Tully Ryan puts it, "I believe that setting realistic expectations is critical."[4]

Keep in mind that post-closing involvement is often part of the deal. Many transactions include a transition period where you’ll stay involved for weeks or months to help ensure a smooth handoff. Build flexibility into your timeline to account for potential delays, whether they’re due to market changes, financing hurdles, regulatory approvals, or extended due diligence.

Lastly, don’t forget seasonal factors. Some businesses sell faster during peak buyer activity or when their financial performance is strongest. By setting year-over-year revenue goals and tracking your progress against benchmarks, you can ensure steady growth and adapt to any changes along the way[25].

Conclusion: Key Points for Selling a Business

Selling a business typically takes around 10–12 months, though the timeline can vary depending on factors like the size of the business, its industry, and current market conditions [1]. Key elements such as business size, location, and the state of the market play a major role in determining how quickly a sale can be completed [3]. One of the most controllable aspects of this process is preparation. Businesses with well-organized financial records and clear operational systems generally sell faster than those lacking proper documentation.

Pricing is another critical factor. Setting a realistic price is essential to avoid delays. Overpricing, for instance, can extend the timeline by as much as 40% [1].

Professional preparation can greatly impact the outcome of a sale. Crystal Stranger, CEO of Optic Tax, emphasizes the importance of early financial planning:

"It is best to prepare financial documents well in advance of planning to sell a company. Financials are not something to rush. Tax regulations, including state tax risks, can come back to bite you when selling a company." [9]

Businesses that involve professional advisors in the sales process often achieve 1.5 to 2 times higher EBITDA compared to those that do not [26]. Additionally, proper preparation helps reduce deal risks - approximately 30% of deals fall through between signing the letter of intent and closing [26].

The market for business sales is shifting, with about 75% of private businesses expected to change ownership in the next decade [26]. This trend, combined with potential tax law changes and market uncertainties, makes it more important than ever to ensure your business is ready for sale. As Matt Bisturis from Schwabe, Williamson & Wyatt points out:

"The biggest thing for 2025 is uncertainty, especially when it comes to potential tax law changes... I suggest that owners who are considering selling get prepared to act quickly if the right opportunity comes along." [27]

This evolving landscape underscores the importance of readiness and early planning to seize opportunities as they arise.

Throughout this article, three key pillars for a successful sale have been highlighted: thorough preparation, expert guidance, and setting realistic expectations. Ideally, preparation should begin 18–24 months before listing. This allows time to address operational challenges, improve financial performance, and organize the documentation buyers will expect. By focusing on these essentials and giving yourself ample time, you’ll be in a strong position to achieve a transaction that aligns with your financial and personal goals.

FAQs

How can I prepare my business for sale to speed up the process?

To speed up the sale of your business, the first step is to get your financial records in order. Make sure everything is accurate, complete, and up-to-date. Next, consider getting a professional valuation to establish a clear understanding of your business's worth. At the same time, tackle any operational issues that could make your business less attractive to potential buyers.

Assemble a reliable team of advisors, such as a business broker, accountant, and attorney, to help navigate the process. Don’t overlook key areas like reviewing tax obligations, keeping key employees informed, and planning how to maintain strong business performance throughout the sale. These steps can help smooth the process, minimize delays, and attract serious buyers.

How do market conditions and the economy affect how long it takes to sell a business?

Market trends and economic factors heavily influence how quickly a business can sell. When the economy is booming and buyers feel confident, businesses often sell faster and fetch higher prices. However, during periods of slower growth, reduced consumer spending, or global uncertainty, buyers tend to be more cautious, which can slow down the process.

Lower interest rates might motivate some buyers to make a move, but challenges like reduced activity in the market or unpredictable valuations can still stretch out the timeline. Keeping a close eye on market conditions and thoroughly preparing your business can make a big difference in navigating these shifts successfully.

How can professional advisors help speed up the sale of a business and maximize its value?

Professional advisors, including business brokers and M&A specialists, are key players when it comes to selling a business. They bring specialized knowledge in areas like determining the right valuation, finding serious and qualified buyers, and navigating the negotiation process. This expertise can help speed up the timeline for closing a deal.

On top of that, their experience often leads to more favorable deal terms and potentially higher sale prices. By taking on the complexities of the process and offering strategic advice, these professionals free up business owners to focus on their day-to-day operations, ensuring the sale is handled smoothly and efficiently.

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