We received a lot of feedback from our first post on how long it takes to sell a business. So to follow up our Managing Director, Al Fialkovich, has answered a few of the questions we received here:
Based on businesses you've sold and the market, can you give us an average length of time it takes to sell a business?
- Typically, the industry average to sell a business is 9.5 months. At Transworld Denver, our quickest transaction this year was 75 days (including SBA financing). Our trailing twelve-month average is 148 days, which is a little shy of 5 months.
Why do some businesses sell faster?
- A variety of factors can determine how quickly business will sell: price/earnings, financed versus a cash deal, how clean the books and records are, the category or type of business and/or the employees and management that are in place. (We expand on these points in part 1).
Does the price of the business matter?
- Similar to what you see in the housing market, good companies are selling fast if they are priced appropriately.
At the end of the day, it is about finding a good fit with both the economics and personalities. There was a story my good friend told me regarding a business in Florida. The company had no books or records. They raised mice for snakes to eat at zoos and pet stores. The company sold for full price in 7 days! And the purchaser still rents the shed from the original owner in his backyard. There is a buyer out there for any business. It is all about finding a good fit and choosing the right team to get it done.