Examining the median time on the market data for different types of businesses provides insights into the factors influencing the duration of typical business sales. Selling a business involves preparations before it’s listed, such as optimizing financial strategies, streamlining operations, and organizing documentation. This planning process usually takes two to three years.
Once the business is listed for sale, the general rule is that it takes six to twelve months to sell, but variables between individual businesses can affect this timeframe. Factors such as price, complexity, management structure, and type of business influence the speed of the sale.
Market data shows that median days on the market (MDOM) for businesses, in general, is around 200 days, or a little over six months. However, specific types of businesses may sell faster or slower. Higher-priced businesses generally take longer to sell, and businesses with passive income streams or minimal owner involvement tend to sell more quickly. The value of the business, nature of the revenue stream, owner involvement, financing availability, seller responsiveness, buyer experience, location, and market activity also impact the duration of the sale.
It’s important to note that these trends provide insights but cannot predict the exact time it will take to sell your own business. Each business sale is unique, influenced by both the buyer’s actions and the seller’s conduct. Finding and screening serious buyers, organizing and providing necessary documentation, pricing the business appropriately, and negotiating effectively contribute to maintaining sale momentum. Ultimately, the time to close the sale depends on both parties working in good faith to reach a mutually beneficial agreement.