'How long does it take to sell a business' is arguably the most difficult question for anyone to answer.
Only the market knows.
But the question on time to sell business persists as one of the top questions for business owners who are seeking a definitive answer. They may perhaps have plans post-exit or have the wrong expectations on the time needed to sell their business.
The salient question that business owners are really asking is, 'How long should I have to mentally prepare myself to stay in the business?'
If your business is priced correctly, has substantial buyer demand for your type of business and is ready for sale with sufficient verifiable documents, then you should expect to stay in the business for 12 months, give and take.
However, if your business is priced wrongly or does not meet ATO small business benchmarks or does not address the objections of buyers or has a problem in anyway, then it becomes near-impossible to predict how long it'd take to sell your business. An element of luck and randomness will be involved.
You should be prepared to stay in the business for as long as it takes. This could mean months or even years. In this current market, some businesses can stay unsold for years without a buyer - not quite the exit strategy the owners have envisaged.
The reality is usually not as grim. Most business owners will eventually come to some awareness of the truth on their business and make the necessary changes so that they exit one way or another.
The least desirable outcome is when the business owner is forced to terminate the business when they are unable to find a buyer. Health issues and the expiration of the lease are common culprits.
Serious health issues can happen at any time to the owner, and when it does, it tends to affect the business adversely. Turnover may drop drastically. Customer service is affected. Quality of the product or service deteriorates. Morale in the business falls.
When ill-health occurs, the owner may try to sell the business at basement prices but the value of the business has already been compromised, sometimes irretrievably. Buyers are wary at the reason for the sale and the impact on the business at this stage, even if the price is a fraction of the original asking price.
Without a buyer, the owner may be forced to shut the business down. This is regrettably not exiting the business on the owner's term.
The expiration of the lease on the premise is also an important turning point for the business. To sign a new lease means the daunting prospect of staying years in the business, while taking on the risks that no buyer shows up. Weighing up the options, the business owner could well take the opportunity to walk away from the business at the end of the lease term without any pay-offs.
The best scenario is where you exit the business on your own terms - one where you control the timing of your exit and you do not allow yourself to become a victim of circumstances.
The Three (3) Pillars To Exit formula explains the necessary and easy-to-understand core foundations required to sell a business in good time. The formula re-focuses on the necessary action to exit on your own terms, rather than engaging in crystal ball gazing to guess the time to sell business.
Read Next - > The Three (3) Pillars Formula To Exit
Last updated: 20 December 2018