The first restaurant chain I sold took longer than a year. After a lot of back and forth negotiation and a three-month-long closing process, the owner could finally make his move to the sandy beaches of Delaware.
When he first came to me, he was wondering how to sell a business quickly. He was beyond ready for retirement.
Under his leadership, the pizza parlor he inherited from his father expanded into three locations. He was a natural businessman and used to closing deals.
He heard I was good at my job from a friend and thought we would be able to sell the business in three months or less.
I have no idea how he came up with that estimate.
It was clear he didn’t know about the process involved when you’re putting up your business for sale in the USA. I had to take him through a breakdown to set his expectations.
Creating an Initial Advertisement: 1 – 3 Weeks
If you know how to evaluate a business for sale, you will have accurate and organized financial records that go back at least three years. With no flaws in your accounting, writing an advertisement should be straight forward.
We will put together a confidential business report to give to potential qualified buyers. In that report will be an accurate business valuation, a five-year plan, and details of the property and assets of the company.
But if your information is unorganized, you can tack on at least another two weeks time for us to sort through everything and find the data we need.
Finding Qualified Buyers: Ongoing
Before we share information about your business with anyone, we put them through a screening process. We want to make sure that we only disclose confidential information to qualified buyers.
Fortunately, we have many prequalified buyers in our network. But, we also get a lot of first-time buyers who aren’t prepared for the audit. It can take them time to pull together the information we request.
Once a qualified buyer shows interest, we often set up a showing. They will want to see any real estate the business owns and get an idea of the day-to-day operations.
They will also want to know details about any leases you might have, find out who your suppliers are so that they can create relationships with them, and learn about your staff.
Some businesses are popular and show often. The more people there are interested, the more leverage I have to negotiate a great price for you.
Negotiations: 1 – 6 Months
There are a lot of factors that will go into the negotiation process:
- How well your business is priced
- What industry you are in
- How well your business is doing
- How much your employees cooperate with the process
- How quickly the buyer is able to get financing
- How quickly everyone submits their paperwork
It’s important that we take our time during the negotiation process. We need to make sure that the deal we are building will be stable.
If you put too much focus on how to sell a business quickly, you may end up losing the sale from lack of due diligence.
Approvals and Closing: 1 – 3 Months
Although we prequalify buyers before starting the sale process, there are still a lot of approvals we have to go through at the end.
We may have to compile ecological reports, help a buyer obtain financing, negotiate lease extensions, and get approval from all involved parties.
Since there are so many moving parts in this process, it can take as long as three months.
During that time, it can feel like you’re holding your breath. But when you work with me, you can rest easy.
I have a lot of experience selling businesses. I don’t build deals on a shaky foundation. Each step of my process is created to ensure both parties are on the same page along the way. Put Dolan Sales in charge of your business sale, contact us today.
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