How long does it take to sell a small business?
Most owners are surprised by how long a sale takes. Knowing the usual stages helps you plan your retirement date with less stress.
The usual stages
- Getting ready: a few months to a few years. Tidy your records, write down how things run, and fix obvious problems. See how to prepare your business for sale.
- Finding a buyer: often a few months or more. This depends on the type of business, the price and the location. See how to find a buyer.
- Agreeing terms: a few weeks. You and the buyer agree the main points in a letter of intent.
- Due diligence and financing: often one to three months. The buyer checks your records and arranges their loan.
- Legal documents and closing: a few weeks. Lawyers prepare the agreement, the lease is assigned, and you close.
- Handover: weeks to months. Many sellers stay on for a while to introduce the buyer to customers and staff.
Added together, many owners find that the time from deciding to sell to walking away is a year or more.
What speeds a sale up
- Clean financial statements and tax returns for the last three years
- A lease the landlord is willing to assign
- Written lists of suppliers, customers and recurring jobs, so the business can run without you
- A buyer who already knows the business, such as an employee. See selling to an employee.
- Being willing to finance part of the price. See vendor take-back financing.
What slows it down
- Numbers that don't match the tax returns
- Customers who only deal with you
- Surprises found during due diligence
- Waiting too long, until health or energy forces a quick sale
A simple plan
Pick the date you'd like to be out, then count back at least a year. Get a rough value estimate now, talk to your accountant this year, and start writing things down. Our free resource kit includes a printable timeline. Not sure whether to sell at all? Read should I sell or close?
Common questions
How long does it usually take to sell a small business?
It varies widely. Once a business is ready and on the market, many small sales take somewhere around six months to a year to close. Getting ready beforehand can take months or years.
What slows a sale down the most?
Messy records, a lease that can't be transferred, a buyer who can't get financing, and a business that depends heavily on the owner.
Can I sell faster if I lower the price?
Sometimes, but a fair price with good records usually helps more. Buyers move faster when they trust the numbers.
Ready when you are
Listing is free and takes about 10 minutes. Your details stay private until you choose to share them.