How long will it take to sell my business?

There is a great deal of variation in the time frame but if we had to pick an average time, eight to nine months may be close. While this may sound like a long time, all of the facets of selling a business including listing the business, finding buyers, interviewing buyers, writing contracts, due diligence and finally the closing process are all time consuming.

Don't forget about your lease:
At ABA we have heard many times:  I have a long term lease with my landlord. Am I going to be able to transfer that or I will not have a problem with the landlord, but..... transfer of the lease is crucial to the success of the transaction. It will be almost impossible to consummate a deal unless the lease can be transferred. Leases will have a clause that defines the landlord's rights regarding transfer. Frequently the seller will be required to remain as a guarantor of the lease and often there may be a charge by the landlord for the transfer.

Many times with small businesses we hear?
I've taken a good bit of cash out of my business and not recorded it, in valuing my business do I get credit for that?  This is a big No.  No double dipping here. This is a difficult one, it is very, very difficult to prove to a prospective buyer that you have earned income that has not been reported. The only suggestion here is if you are not reporting income stop right now and maintain accurate records including all income. There are some businesses that do sell in spite of this fact. 

There still aren't too many ways to finance the purchase of a business. Here is a brief rundown of the primary methods:

Buyer Financing
Some buyers may have the cash available to purchase the business. Some may elect to use the equity in their residence, or other real estate. Others may have other assets that they can sell or borrow against.
Bank Financing
Banks may lend against a buyer's assets as described above. They may also lend against the assets of the business, assuming there is sufficient value to support the loan. The business will also have to make sense to the bank, regardless of the asset value. In fairness to the banking system, many of the figures supplied by business owners have very little relationship to the actual earning power of the business.  

So here we are, after 3 years of work with 3 buyers, nothing had been accomplished. At this point, I decided to call Karen Rehn at Acquisition Business Advisory Services and list the company with them. Within 3 weeks, they found a very qualified buyer and 5 weeks later I had a letter of intent to purchase the business in hand. 30 days later that sale closed. I was very impressed with the profile of my business ABAS put together and the professional manner of all the employees of ABAS demonstrated.

As a trusted business advisor I have heard former business owners telling people that they sold their business for “six times earnings.” As a Business Intermediary, the first question we hear from prospective clients is “Can I get the same multiple if I sell my business?” The answer is an unequivocal "it depends." It depends on a number of things, but first and foremost, it depends on how you define “earnings”.  As all business intermediaries and sellers know, “Cash is King.” After all, cash removes the seller’s risk in the transaction. However, when a buyer pays cash for a business, that buyer wants to know exactly how much the business is earning.

Anyone who is considering selling - or -buying a business wants to know the advantages of using the services of a business intermediary. They also want to know what to expect from using their services.