Business owners underestimate the time it takes to prepare, market, and sell their business.
Do you ever have those days when, regardless of how much you love your business, you feel like you want to sell it - like NOW? Selling a business isn't easy and how to sell a business quickly is a bigger challenge.
The number one mistake business owners make -and I’ve been there too- is believing that they can sell their businesses quickly. They underestimate the time it takes to prepare, market, and close a sale.
How long does it take to sell a business?
If you think that selling your business will be done and dusted in just a few months, you might need to adjust your expectations. Optimally, even with a well-prepared business, expect the sales process to take between 6 to 12 months from preparation to closing.
If your business isn't immediately appealing to buyers, exit-ready, or not valuable enough for you to want to sell it, which is true for about 80% of businesses, the timeline could extend to several years, rather than months.
“Due diligence was supposed to take 90 days instead it took 6+ months. Even with clean financials and great process documentation. It was not anyone's fault but once you get the lawyers involved things slow down.” Nathan Hirsch founded and sold Freeup.net and now runs Outsourceschool.com
Understanding how to prepare for your exit is crucial. Without the right strategies, implemented early, you risk making the sales process longer or having to compromise on price.
If you're unsure about the right approach, don't worry. This article will guide you on the appropriate time and method to plan your exit.
Proven Tactics to Sell a Business Quickly
Before taking the bold step of selling your business, it's crucial to have a well-thought-out plan. This will not only ensure a smooth transition but also help you maximize your profits.
“I’d love to say I started my business with an exit plan in mind. But truly, it didn’t occur to me till about year 12! Now that I started another business, it has a radically different business model as I’m in a different stage of life. Owners need to plan for that too.” Leona Watson, exited founder of Cheeky Food Events.
Here are 5 steps to sell a business fast:
- Step 1: Start planning from the start of your business (or now)
- Step 2: Streamline your business operations
- Step 3: Determine the ideal timing for your exit
- Step 4: Organize your legal and financial documents
- Step 5: Develop a robust transition plan
These steps, if followed diligently, will put you in a favorable position when the time comes to sell your business.
5 steps to sell your business quickly
Step 1: The best time to plan your exit was when you started your business, the second best time is now
The journey towards preparing and selling your business for maximum value begins the moment you draft your business plan. Businesses that are built to sell choose different growth strategies and set up the business in such a way that the selling process is much easier in the future.
“We build all our businesses to be sellable from day one. Even if we don’t want to sell them. That means clean financials, great team and processes, and a backbone of SEO.” Nathan Hirsch founder of Ecombalance.com, accountsbalance.com, nathanhirsch.com and trioseo.com
Step 2: Improve Your Business Operations
A business that operates smoothly and effectively is always appealing to prospective buyers. Strive to ensure your business is efficient and all processes are well-documented. Your team can triple your exit price, so have a team that runs the operations and a second-tier management to rely on.
“Three things we’ve never cut corners on for our startups: lawyer, accountant, and foundational software. When selling your company, you need to be able to move quickly. These three things are the backbone of your operations.” Melissa Kwan, exited entrepreneur and current Cofounder of ewebinar.com, profitled.fm, and melissakwan.com
Step 3: Choose the Right Time to Exit
Timing your million-dollar business exit is an art and it significantly impacts the outcome of the sale. Ideally, you should sell when your business is thriving and market conditions are favorable. Avoid selling during a market downturn or when your business performance is subpar.
With 2,400 businesses for sale every day, we are currently in a buyer’s market, which will likely last for at least another decade. There are more businesses for sale than there are buyers looking to acquire. When they have the luxury of choice, you as the seller need to build an irresistible business for acquirers.
Advice: Do not wait until you're burned out or the market is in a slump. Stay informed about industry trends and seek professional advice to determine the best time to sell. By planning ahead, you will sell your business on your terms.
Exited business owner and current CEO of Create & Grow Georgi Todorov testifies that exiting fast is possible when you are ready and the market time is perfect:
“I sold my online business within one month. But that’s because I had prepared all details in advance. Also, I was proactively looking for a potential buyer.”
Step 4: Get Your Legal, Financial and Operations Documents Ready
Having all your legal, financial and operations documents organized and readily available instills confidence in potential buyers and it will make your life less stressful once you start the selling process. Having your documents in order also increases your business's value.
“I think the smartest thing I did was implement a reward system for documenting processes and made it a competition with staff, with random prizes given out. Every week for 6 months a new process was documented across all areas (Sales, Ops, Finance, Tech). The team owned the creation, the implementation and the updating. When I went to sell years later, the operational documents were all ready. It made us look professional, organized and best of all…valuable.” Leona Watson, ex Founder and CEO of Cheeky Food Events.
Step 5: Make a Plan for the Transition
A comprehensive transition plan, made upfront, makes your business attractive to potential buyers. It demonstrates your commitment to ensuring a seamless change of ownership.
Tip: Draft a detailed plan outlining how the new owner will assume control of the business.
Your Exit Strategy Challenge
- Reflect on the steps provided in this article and start creating your exit strategy.
- Consider the exit-readiness of your business.
- Share your plan with trusted mentors and business owners to get valuable feedback.
So, when that feeling pops up again of wanting to sell your business now, be ready for it.
Prepare your business now to sell it for maximum value later.
