Seven to Nine Months Is Normal
From hiring a broker to closing, a typical sale takes seven to nine months. Six months is fast. Owners often feel it is dragging even when it is right on pace, so it helps to know the stages up front.
1. The Valuation Conversation
It starts with your numbers and a frank talk about price. A broker reviews your returns and statements, recasts the profit, and gives you a range. If it doesn't meet your goal, you can stop there and work on the gaps first.
What to bring to that first call
- Three years of business tax returns
- Profit and loss statements for the same years and this year to date
- A rough list of equipment, vehicles and inventory
- Your lease, or a note about the real estate if you own it
Don't wait until everything is perfect. A broker can work from rough numbers on the first call and tell you which gaps matter.
2. Getting Ready to Market
If you go ahead, the broker gathers documents and writes a detailed selling memorandum about the company. It covers history, staff, customers, finances and growth. A strong company still needs to be presented well.
This is also when you clean up loose ends. See preparing your company for sale for the usual list.
3. Confidential Marketing
Your company is listed blind. A buyer sees the industry, the area, sales and cash flow, but not the name or address. Only buyers who sign a confidentiality agreement and show they can afford the deal get the full memorandum.
Keep the news quiet at work. Closing dates slip, and staff who hear early can leave or talk. Most owners tell employees at or after closing.
4. Meetings and Offers
Serious buyers meet you, often at the company after hours. Then come written offers, usually a letter of intent setting the price, how it is paid and what happens next. Price is only one part. Terms decide how much you keep.
5. Due Diligence
Once you sign a letter of intent, the buyer and their accountant, attorney and lender dig in. Expect requests for bank statements, contracts, payroll records, licenses and tax filings. Fast, complete answers keep momentum.
Keep the company running hard during this stretch. A slipping month in the middle of diligence can reopen the price.
Expect a few surprises. Diligence often turns up an old filing or an expired permit. Most are easy to fix if you raise them yourself before the buyer finds them.
6. Financing
Many buyers in this range use an SBA 7(a) loan, up to $5 million. The lender orders its own business valuation and often wants the seller to carry part of the price on a note, sometimes on standby for a period.
7. Closing Paperwork
Attorneys draft the purchase agreement, the lease assignment, the non compete and the training terms. In Arizona the buyer will want proof that your transaction privilege tax is paid before releasing all of the money.
Our sale paperwork section covers each filing, including how to cancel your Arizona TPT license and withholding after a sale.
8. The Handoff
After closing you train the new owner for an agreed period, introduce key customers and vendors and help keep staff steady. Planning that handoff early makes it smoother for everyone.
Curious where your company would land? Start with how buyers price a small business, then send the form or call (480) 555-0124.