Congratulations, you’ve taken the first step! You’ve crossed the emotional hurdle of parting ways with something that may have been a significant part of your professional life as well as your personal life. Business owners are defined in large part by the businesses they own and run.
The more immediate question may be “Will my business sell?” as opposed to “When will my business sell?” Statistics provided by some of the more popular business-for-sale websites paint a troubling picture – about one in five of those listings you see will actually sell during the listing period. There are multiple reasons why a business will not sale and each case is different, but the majority of times it is a result of the asking price being too far above the fair market value that the business should demand in an open and free market place. Many owners have a “gotta have price” that they will not retreat from, and if that price is too far above FMV then the end result is predetermined. In today’s digital world the old adage “There’s a sucker born every minute” no longer applies.
Another reason might be that the cash-flow–to-owner generated by the business is either too low or in fact the business is operating at a loss. Low cash flow businesses can still sell, but typically at a discount since buyers do not like to pay top dollar for the future investment that they will need to make in the business to make it worthwhile to operate. Time permitting the owners may find it more prudent to invest the time and energy to move the business forward in terms of earnings and sell at a future date at a more acceptable price.
But assuming you have a desirable business that is operating cash flow positive and can provide a good income to the buyer with opportunities for growth, and the business is priced fairly, you could anticipate a high level of buyer interest. Generally speaking, most main street businesses that sell will do so in the six-to-twelve month window. Some will sell sooner, especially in certain attractive industries or if there is a serious buyer out there that has been waiting for such an opportunity to appear. Others will take longer than twelve months, depending on unique circumstances associated with each business. Since most buyers do not have or do not want to pay 100% down at closing, the ability to offer outside financing through an SBA lender or via seller financing will be a key factor in determining the salability and time it takes to sell a business. A good Business Broker should be able to assess you business and the current market conditions and provide you with their opinion on the salability and time-to-sell, but no Broker can (or should) guarantee a sale…unless they buy it themselves!