If you’re looking to sell your business, you’ll naturally want to complete the sale as quickly as possible. After all the next chapter or whatever you’re moving on to will be waiting. The exact length of time it will take to sell your business will depend on a number of factors which we’ll be covering in this guide. However, generally the average time for selling a business is somewhere in the region of 9-12 months.
In some cases, it can be much quicker than this, but each situation is different. Also, typically the bigger the business the longer the sale will take as there’s more intricacies involved. A smooth and successful business sale can be achieved with the help of our commercial conveyancing solicitors in Cramlington.
What factors can impact how long it takes to sell a business?
H3: The sector your business is in
The sector of the business is a key contributing factor to how quickly you’ll be able to sell. This is because certain sectors might be experiencing external problems that mean running a business within that industry is more challenging. For example, if you work in a sector like oil and gas which has faced significant challenges from the rise of renewable energy sources and new regulations being introduced to tackle carbon emissions, it could be more difficult to find a buyer to take on a business in that sector.
In addition, sectors that are very saturated already and struggle to organically grow often see more business sales. The reason for this is that one of the simplest ways to develop a successful business in that sector will be to buy a competitor. Some examples of sectors where businesses sell reasonably quickly include accountancy firms, IT, commercial cleaning, and facilities management. Industries like these are always regrouping and consolidating. Buyers will have a clear intention and cash reserves to grow their clients with service contracts that can sustainably generate recurring revenue. As a result, sales can go through quicker compared to more complex and competitive sectors.
How prepared you are to sell
If you aren’t fully prepared to complete the sale of your business, that will delay the process. As experienced property solicitors in Whitley Bay, we can help make sure that you know exactly what documentation you need and the steps you need to follow to make the sale as quickly and efficiently as possible. Having a readily available information pack for instance, can provide buyers with the key details they need to make their decision.
By taking the time to pre-empt what documents potential buyers might want along with the standard requirements, business owners can streamline the process and help it move quicker. Equally, during the process you will find people that are “just looking” as well as potentially serious buyers so it will benefit your timeline if you tailor the volume and depth of information you provide to interested parties.
In terms of preparation, you should always strive to present the business in the best possible light. A business that looks healthy with control over assets, liabilities, cash flow, and revenue will attract stronger prospects more quickly. Also, the seller must successfully complete due diligence checks, knowing your responsibilities is key when selling a business.
The market can change on a regular basis, which in turn might influence the timeframe of selling your business. Changes in the market aren’t always a bad thing, in fact they can sometimes be beneficial. However, they can also negatively affect the sale of your business and make the process longer than it would normally be. Some examples of market factors that can influence the timescale of your business sale are:
When the UK officially left the EU, it led to many legislative changes in how UK business could trade with countries in the EU. Following this, a lot of businesses decided to adapt their business model to ensure that it could continue to be sustainable and profitable. Even in the face of increased company overheads and red tape. By changing their operations to keep up with the new post-Brexit landscape, you’re more likely to attract confident buyers.
New trends can bring businesses working in the same area plenty of lucrative opportunities. Even though they can fade and be replaced by newer trends as time goes on. The gap they can leave in the market can have a big impact on consumer behaviour, as well as create strong potential for someone to fill the gap with new products and services. If your business is offering something unique, you can draw in keen buyers and reduce the chance of a competitor snapping up the opportunity first.
The economy is still fragile and recovering from the damage caused from the coronavirus pandemic. This means that buyers are more hesitant in making big financial commitments amongst so much uncertainty. A good way to combat this and give potential buyers confidence in purchasing your business is by being upfront with relevant risks and how to address them.
How to determine the sale price of your business
Pricing your business too high will be detrimental if you want a quick sale. Potential buyers will look at several factors about your business when deciding if they want to buy it. So, making sure your price reflects those factors will help you achieve a fast and successful sale. Some examples of these factors include where the business is located, cash flow, existing contracts, how much money it’s making, and what type of business it is.
Not only that, but they might also look at the existing management team within the business and how effectively things will operate once you’ve left. To help convince potential buyers you’ll want to make sure that the less things rely on you the better and show that you aren’t crucial to the success of the business.
If you’re looking to sell your business quickly and effectively, the best thing you can do is use expert solicitors like the team at Toomey Legal. Our specialists have extensive experience in online conveyancing in Newcastle and will work to ensure your sale goes smoothly without any unnecessary delays. Contact us today to find out more about how we can help you.