The Importance of Patience When Selling Your Business
A business sale takes time because several things have to line up: a qualified buyer, the buyer’s financing, diligence, and keeping the sale confidential while all of that happens. No one can honestly promise how long it will take. It varies with the books, the price and the buyer. Knowing why helps you plan, and there is more in your control than it feels like.
Why a sale can take time
- Buyer financing: Many buyers use a lender, a seller note, or both. Lender review and negotiating terms can add steps, and terms can change along the way.
- Due diligence: Buyers test your financial records, add-backs, customers, contracts and operations. If the records are not clean, questions pile up. Surprises in diligence are what stall a sale.
- Confidentiality: Describing the business without your name, screening buyers, and releasing information in stages is slower than a public listing. It also protects your employees, customers and relationships.
- Finding the right fit: Not every inquiry is a qualified buyer. Weigh the price, the terms, and whether the buyer can actually complete the deal, not just the first offer.
- Conditions change: Interest rates, lending conditions and your own results all affect timing. Talk with your advisors about timing, and know that no one can time it exactly.
What you can control while you wait
- Keep the books clean: Three years of organized records, reconciled and ready to share when a buyer is screened.
- Document your add-backs: A list of owner pay, personal expenses, interest, depreciation and one-time costs a buyer can test. See What SDE Means When You Sell an Owner-Operated Business.
- Reduce owner dependence: Write down how the work gets done and let capable employees run key tasks, so the business does not depend on you alone.
- Keep running the business well: Customers, service quality and employee morale still matter during the sale. Keep changes minimal, because layoffs or big overhauls can raise questions for buyers.
- Keep key employees informed as appropriate: A capable team in place is valuable to a buyer. Share only what you need to, and only when you need to.
- Respond quickly in diligence: Having documents ready and answering promptly helps keep the sale moving.
Patience is not the same as waiting
Using the time to prepare is different from waiting for a perfect offer. A prepared business and clear records can reduce delays and surprises. They do not guarantee a sale, a price or a date. How to Sell a Business in Nashville lays out what the process looks like, from a confidential look at the numbers through buyer screening, diligence and closing.
A next step
If you would like to talk through where your business stands, start with the free valuation calculator for a directional starting range. How We Value an Owner-Operated Business explains how that range is built. Or call 615-240-5235 for a confidential conversation.
By Michael DeVault, business broker and BBDG Nashville affiliate at BridgePoint Business Group.
