San Francisco Bay Area :: Business Sales, Valuations, and Advisory Services for Privately Held Companies

How Long Does it Take to Sell A Business?

Some recent studies have revealed that the time it takes to sell a small business has increased dramatically over the years. For example, in 1978 the average time it took was only 57 days. In 2001, the average length of time was 225 days. That means that it now takes almost four times as long to sell a business as it did 23 years ago. The intervening years show the gradual increase in the time necessary to sell a small business. Why has this time factor increased? Here are just a few of the reasons:

• Buyers are better educated and informed
• Buyers are more reluctant to make that leap of faith so necessary to go into business for oneself
• Buyers require more information from a seller
• Buyers and sellers use more outside advisors
• Requirements for the closing have increased due to more governmental regulations

There are obviously additional reasons depending on the nature of the business, complexity of the deal, buyer and seller cooperation and the time schedule of the advisors in the transaction.

Sellers can assist in the process by gathering all of the information prior to going to market. For example, such items as: an equipment list, lease information, tax data, list of licenses and permits, any existing loans, leases and equipment debt, plus any other documentation that a prospective buyer might want to review, or any documents that might be helpful in drawing closing papers.

In this age of technology, it is difficult to believe that it actually takes longer to close the sale of a business than it did 23 years ago. In this age of fax machines, Email, computer technology, cell phones, it must be a people problem. Buyers and sellers can help by making sure they are proceeding as quickly as prudently possible, providing the necessary documentation on a timely basis, making sure their outside advisors do the. paper work expeditiously. A business broker moves this process along by making sure that everyone involved is doing what is necessary to get the deal done. Everyone involved in the transaction must remember that time is of the essence.

Copyright 2007 Business Brokerage Press