How long should it take to sell my Business?
We’ve been involved in a number of transactions recently that, as I’ve reflected on the timescales involved, remind me that there is no ‘one size’ fits all when it comes to the timeline and course a transaction takes. From 2 days to (almost) 2 years!
I’m pleased to say that we’ve had a busy period of completing deals over the last few months. Our clients and potential clients often ask out the outset – “How long will it take?” (As well as “How much will it cost?”)
“It depends” is, sadly, my common reply. It really does depend on a number of different and variable factors in each unique transaction. It depends on the details in the transaction (each business, selling group and buying group are different with different motivations, different funding sources, different expectations). It depends on the number of premises, how they’re owned, what’s happening to them as part of a deal; it depends on the employees, again how many of them and what changes (or measures) if any are being proposed in respect of them; it depends on the assets, the financing of the transaction, the litigation history (past current and threatened), and compliance (increasingly a worry for both buyers and sellers).
A sample of recent transaction all completed in the last few weeks – all were company transactions (not assets) and involved a number of sellers, and a corporate buyer:
One we engaged on terms to sell half their business in 2 days (from our instruction).
Another took 2 weeks from the seller and buyer entering exclusivity and agreeing heads of terms (although some of the due diligence had been carried out during the offer and negotiation phase).
Another took 2 months – within the norm for a transaction from instruction and agreeing heads of terms.
Yet another took just under 2 years – this was incredibly slow, in part a result of reluctant sellers, and a patient buyer.
With all the uncertainties in the macro economic environment it’s always advisable to aim for a swift and smooth transaction. This can be helped by robust pre-terms due diligence process undertaken by the sellers and their advisers.
This enables the seller to proactively prepare its information pack and its replies to standard enquiries. This allows the advisers to identify any potential issues early and deal with them in a timely and appropriate way (don’t risk them becoming a reason to allow the buyer to request particular protections for you or worse, chip the price).
Final tips: Both parties – Instruct solicitors who are experienced in corporate transactions. Buyers – have your funding agreed and understand the key risks you’re undertaking. Instruct your professional team to progress swiftly through due diligence.
For more information,
Contact our corporate team for a no obligation conversation: firstname.lastname@example.org or 0161 926 9969 OR request a free copy of our guide to selling your business (email email@example.com)
Or read our guide to selling your business here: https://smallbusiness.co.uk/buying-a-business-what-you-need-to-know-2479602/