On average, it takes six to nine months in Australia to sell a business. It is well known within the business brokerage industry that it takes on average 6 to 9 months to sell a business. This is why business listings on Business Trade last 9 months to cover the average sales time of a company. All of the factors mentioned above affect this process, and there are things that the buyer, seller and commercial agent can do to speed everything up.
If you intend to sell your business, consider all the factors and processes that may affect the time it takes you to sell your business. Industry professionals say it takes 2-3 months for a potential buyer to perform due diligence and get funding. So, once you have a buyer in line, you need to be prepared for the time it takes you to hire your own professionals to perform due diligence. It's important to note that, with tighter banking restrictions on lending, many loan applications are failing, so even if you have a buyer in line, financing could be a problem.
Therefore, it is a good idea to keep your advertising active until the agreement occurs. In the six to 12 months before you put your business on the market, you must perform a full review. Look for potential problems and fix them now so they don't delay the sale. The best time to sell your business is when sales and profits are strong.
This helps generate buyers' interest and allows you to add greater value to your business. Planning a successful commercial exit can take up to 2 years, so it's a good idea to use this time to strengthen your business and maximize its value. Recent surveys show that it takes between 8 and 10 months on average to sell a business. This period of time seems to increase every year.
So why does it take so long to sell a business? They may make mistakes during the negotiation stage or discourage potential sellers due to their bad attitude. If you talk to business brokers and industry leaders, they will tell you that it takes 6 to 9 months to sell a business on average. Consider any insurance requirements for your business, such as runoff coverage (where you are insured by any legal claims made after you sell your business). Your business plan should include a thorough analysis of your business and environment, identify strategic objectives, and provide current and anticipated cash flows based on realistic assumptions.
Most of the statistics come from Business Brokers or from AIBB, which is the Australian Institute of Business Brokers. The more prepared and realistic the owner is with the price he is setting, it can affect the duration of the company in the market. If you have a clearer idea of what you are looking for from the sale ahead of time, this will help the broker find more qualified buyers to buy your business. When employees transfer with the company, you must provide all relevant employee information to the new owner.
On the other hand, private equity groups and strategic buyers may already be properly licensed if they own a similar type of business. The sale of your business may result in additional payment obligations, such as employee rights or tax amounts for the sale of assets. However, if you own a business in the home care industry that requires a specific license, that may affect the sales schedule of your business. In any case, you should prepare in advance if you intend to sell your business and some experts say you need to prepare two years in advance to get the best price.
The process of selling a business is not something that the owner really anticipates and can lead to unrealistic expectations and disappointment. If you need to sell quickly for financial or personal reasons, you may find it difficult to get a higher price. .