How long does it take to sell a business?

The average time on the market for around 82% of businesses is four to 12 months. Fewer than 10% of businesses sell more quickly, and a little over 8% are on the market for more than 12 months.

Why does it take so long to sell a business?

Price and terms are the biggest reasons. Not overpricing the business, partial owner financing, and an owner training period are factors that are attractive to prospective buyers and can lead to a more timely sale. Preparation for the information a buyer may want to review, and having answers to the questions they will ask is key to a making the process more efficient and timely. Using advisors who are transaction-experienced can also shorten the time it takes to close the sale.

These are some documents that a seller would want to gather and have available.
  • Copies of  financials statements for the past three years.
  • A list of furniture, fixtures and equipment included in the sale. Note: try to remove excluded items prior to the sale, or list items excluded from the deal separately.
  • Copies of tax returns for the past three years.
  • Sales brochures, press releases, advertisements, menus or other sales materials
  • A copy of the lease and any assignments of the lease from previous sales
  • A copy of the franchise agreement (if applicable) or any agreements with suppliers or vendors.
  • Supporting documents for patents, copyrights, trademarks, etc.
  • Customer List broken down by percentage of revenues (if applicable)
  • Vendor and/or supplier lists broken down by expenditure percentage
  • Accounts receivable aging report and payables ledger
  • Employee list
  • Growth Plan

These are Typical Buyer Questions That a Seller Should be Prepared to Address
  • Is the seller willing to train a new owner at no charge?
  • Is there any pending litigation?
  • Are there any federal, state, or environmental issues of concern?
  • Are there any copyrights, secret recipes, mailing lists, etc?
  • Customer levels and concentration of customers?
  • Are there any zoning or local restrictions that would impact the business?
  • Are any license or permit issues involved?
  • What about the employee situation? Are there key employees?
  • What about major suppliers or vendors?
  • What can be done to grow the business?