You’ve worked hard to build your business, but now it’s time to plan your exit. Of course, you want to maximize the value of the sale while ensuring that the company is in good hands. Chances are good you also have a lot of other unanswered questions. One of the most common questions we receive from anxious business owners ready to start a new chapter in their lives is “How long does it take a business to sell?”
This is an important question, but the answer is almost always “it depends”. The process of selling a roofing business is complex with lots of moving parts, and your timeline will vary depending on a host of factors, from your business’s size to your industry to the brand recognition and reputation of your company.
The honest answer is that some businesses will sell very quickly. Others might take months. Some may not sell. At AXIA, we’ve worked with business owners across all industries, from startups and SMBs to larger firms.
We’ve found that most businesses sell in six months to a year. However, you’re not powerless here. There are plenty of things you can do to accelerate the process and help ensure that your business sells quickly and for as much as possible.
The Four Stages of Selling a Business
How long does it take to sell a business? A lot comes down to how well you understand the four phases of the process: preparation, marketing, negotiation, and due diligence.
The Preparation Stage
The first stage of selling your business is the preparation stage. It’s also arguably the most important, particularly if you’re asking how long it takes to sell a company with a focus on getting it done quickly but correctly.
This stage lays the foundation for everything that comes later. You’ll need to complete a financial audit of your business, conduct an in-depth business valuation, and compile and verify important documentation (standard operating procedures, operations manuals, lease agreements, etc.).
The Marketing Stage
Once you have an accurate picture of your business’s value and have the prep work all completed, it’s time to get the message out to potential buyers. This is likely to be the longest phase in the process, but you can shorten it with the right steps.
- Choose the right advisor: The right advisor is a critical asset. A trusted partner will help provide you with information while also getting the word out about your business. Your advisor will also act as a buffer between you and potential buyers.
- Blind profile teaser: Your advisor will send out a blind profile teaser to generate interest from buyers. This lists important details about your company without revealing identifying information.
- Sending the CIM: If the prospect is interested in learning more, the next step is for them to sign an NDA and then receive the CIM, before scheduling an introductory conference call with you and your advisor. Note that if multiple parties are interested, you may need to conduct multiple conference calls. Your advisor will help schedule and conduct these.
- Face-to-face meetings: After going through the conference calls, you’ll work with your advisor to shortlist businesses that feel like the best fit and schedule face-to-face meetings.
The Negotiation Stage
How long does it take to sell a business? A lot depends on the negotiation stage. This is where you’ll sit down with a potential buyer and talk “brass tacks”. That is, you’ll review any offers that have been made and decide which ones interest you most.
When you’ve narrowed down the list of potential buyers to those that are the most serious, you’ll schedule confidential, full-day, on-site meetings with each. Of course, if there’s a concern about disclosure conflicts, you can choose to host the meetings elsewhere. You’ll discuss terms with potential buyers and help them learn more about your business.
If a buyer is very serious about purchasing your business, they’ll create and send a letter of intent (LOI) after the meeting. Your advisor will summarize the terms and discuss the offer with you, and then you’ll decide if you want to enter a period of exclusivity with that buyer. Note that during this time, you cannot entertain other offers on your business and negotiations will begin in earnest.
The Due Diligence Stage
If you choose to sign the letter of intent and enter discussions with a buyer, the next stage is due diligence. The buyer will take a deep dive into your business information, including earnings reports. The goal here is to conduct in-depth research to ensure that the purchase is a wise decision and to unearth any potential issues that might arise from the purchase.
Note that the buyer isn’t the only one that should be doing their due diligence. It’s also a smart move to work with your advisor to dig into the buyer’s information to make sure it’s a good fit for your business. After all, you want to leave your business in good hands.
The Closing Stage
The due diligence stage will last four to six weeks. Assuming that all goes well, you’ll then move to closing. You’ll work closely with your advisory team to prepare and review final documents and then execute them, closing the sale officially.
Timeline Influencers to Know
We’ve outlined all the major stages in selling your company. However, there are other factors to know. How long does it take to sell a business? The following elements will play prominent roles in the process:
- Market conditions: Is the market right for a fast sale? Or is it sluggish or beginning a downturn?
- Business size: Your business’s size will dictate your target audience and also affect the speed of sale.
- Your industry: Some industries lend themselves well to faster sales – tech, for instance. Other industries may move more slowly.
The Guidance You Need for a Successful Sale
How long does it take to sell a business? Whether you’re looking to sell a construction company, a technology firm, a manufacturing business, or something else, the right guidance during the process is the key to success.
While the exact time it takes to sell your company will always vary, working with an expert team helps you avoid missteps and make informed decisions.
At AXIA, we’ve worked with business owners just like you to help them maximize the value of their sales while ensuring their businesses were in good hands afterward. From the initial business appraisal to help understanding private equity, expert M&A advisory services, and our industry-leading business valuation calculator, we’re here to help ensure a smooth, positive process. Schedule a consultation today and learn more about how we can help facilitate a fast, lucrative exit for you.
