This is always the million-dollar question when clients come to us seeking help to exit their businesses.
I typically indicate to clients that they need to expect a business sale process to take at least six to 12 months.
The fastest we have sold a business from start to finish is actually six weeks. However, we regard that as a record that will probably never be broken, because it was a unique situation where, strategically, the ‘stars aligned’ between the buyer and the seller.
Preparation speeds up the process
The time it takes to sell a business is heavily influenced by how prepared you and your business are for an open market, or trade, sale.
In order to be prepared, there are some basic things you should have done before embarking on a sales process:
- Gathered and prepared some of the key information about your business that a purchaser will want to examine
- Sought independent advice on the market value of your business
- Sought professional advice on the potential tax and other implications of selling.
If you head into a sale process without having taken these basic steps, at the very least, the process invariably takes longer.
Planning = maximum efficiency, minimum fuss
We’re now having clients come to us up to five years in advance of putting their business on the market to plan out the process.
They engage us to provide a valuation for their business today, then seek our advice on how they can build that value in the context of a potential option to sell in three to five years.
That’s a very measured way of approaching a business succession and a potential sales process and it means that when you do get to the stage of selling and/or exit, the process tends to be more seamless and efficient, both in terms of the time it takes and the mechanics of selling.
It’s also a way of actively building value in your business, while you continue to run it, and then these positions can be objectively benchmarked against the potential position should you decide to exit or sell in the future.
Resources to help you plan your sale
We have created a number of free resources to help our clients and subscribers prepare for a business sale process and maximise their business value on exit:
- Succession planning – How to future proof your business eBook
- Capital Gains Tax 2.0 – Issues to consider when selling your business eBook
- How NOT to sell a business eBook
- How to prepare your business for sale eBook
- Selling a Business Planning Sheet
- Vendor Due Diligence Checklist
You can download these and other free resources from our online Resource Library.
JPAbusiness offers a range of business valuation, advisory and transaction services. For more information about any of our services, contact the team on 02 6360 0360 for a confidential discussion.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.