How Long Does It Take to Sell a Business?

The Big Picture

For an established company, a sale often takes somewhere around six months to a year from the first conversation to closing. Some go faster. Plenty take longer.

Those are typical ranges, not promises. Every deal moves at the pace of its slowest piece, whether that's the books, the buyer's lender, the landlord or the seller's own readiness.

Here is how the time usually breaks down, phase by phase, and what you can do to keep each one moving.

Phase 1: Preparation

Typical length: a few weeks to a couple of months. This is where the broker learns the business and builds the materials buyers will see.

• Gathering three years of financials and tax returns
• Calculating SDE or EBITDA and documenting add-backs
• Setting a price with a broker opinion of value
• Writing the blind profile and the confidential information memorandum (CIM)

Owners with clean books and organized records move through this phase quickly. Owners who need their accountant to rebuild a year of statements can lose a month or more here.

If your records need real work, it's better to find out now. Our guide to valuing a small business shows what buyers will look at.

Phase 2: Marketing and Buyer Screening

Typical length: one to several months. This is the most unpredictable phase, because it depends on how many qualified buyers want what you're selling.

The broker circulates the blind listing, collects NDAs, screens buyers for funds and experience, and shares the CIM with those who qualify. Serious buyers then ask questions and visit.

A fairly priced company in a busy industry can draw interest in the first few weeks. A business with a narrow buyer pool, or a price above what earnings support, can sit much longer.

The goal isn't just finding one buyer. It's lining up enough interest that offers arrive close together, which gives you more say on both price and terms.

Phase 3: Offers and the Letter of Intent

Typical length: a few weeks. Interested buyers submit offers, and the broker helps you compare them, push back and negotiate the key points.

The result is a signed letter of intent, or LOI. It sets out the price, the structure, any seller note or earnout, the transition period and a target closing date.

Most LOIs include an exclusivity period, during which you stop talking to other buyers. That's why the terms in the LOI matter so much: your bargaining power drops once it's signed.

Phase 4: Due Diligence and Financing

Typical length: about one to three months. The buyer and their lender check everything you've told them, from bank statements to customer contracts.

• Reviewing financials, tax returns and add-backs, sometimes with a quality of earnings report
• Looking at equipment, leases, permits and key contracts
• Lender underwriting, which for SBA-backed deals has its own paperwork and approvals
• Meeting key staff, usually near the end and with your permission

This phase is where deals most often stall. A slow answer to a document request can cost a week. A surprise in the numbers can reopen the price.

Keep running the business at full speed during diligence. If sales dip while a buyer is watching, they'll want to know why, and they may ask to renegotiate.

Indiana's 45-Day Bulk Sale Notice

Indiana adds a fixed step to the schedule. According to Taft Law, when more than half of a company's tangible property changes hands, a Notice of Transfer in Bulk goes to the Department of Revenue at least 45 days before closing.

The state replies within 20 days, and a clearance letter is good for 60 days. In a well-run deal, the notice is filed soon after the LOI so the clock runs alongside diligence.

Filed late, it can push back a closing date that everything else was ready for. Our page on Indiana bulk sale tax clearance covers the details.

Phase 5: Purchase Agreement and Closing

Typical length: a few weeks, often overlapping with the end of diligence. Attorneys draft the asset purchase agreement and the documents that go with it.

This is when the details get settled: the working capital adjustment, the non-compete, the seller note terms, the lease assignment and the transition plan. Each can take a round or two of edits.

Landlord consent is a common last-minute holdup. If your lease needs the landlord to approve a new tenant, start that conversation as soon as your attorney says it's time.

At closing, funds move, keys change hands and the transition period begins. Many sellers stay on for weeks or months to introduce the buyer to customers and staff.

What Speeds a Sale Up

• Clean, current financials that match your tax returns
• A realistic asking price from day one
• A manager or team that can run things without you
• A lease with time left on it and a landlord who will cooperate
• Quick answers to buyer and lender requests
• Your attorney and CPA lined up before the LOI is signed

What Slows It Down

• An asking price well above what the earnings support
• Add-backs without paperwork, or books that need to be redone
• Declining sales during the marketing or diligence phases
• One customer or one employee that the whole business depends on
• Lender delays, especially with buyers who haven't been pre-qualified
• Starting the bulk sale notice or landlord consent too late

Start Earlier Than You Think

The sale itself may take most of a year, but preparing a company to sell well can take longer. Owners who start a year or two ahead have time to fix issues that would otherwise cut the price.

If that sounds like you, exit planning is a good first step. If you're ready now, the preparation phase can start this month.

Getting Started

The clock starts with knowing what your business is worth. Request a free, confidential valuation, or call (317) 555-0186 to talk about your timing.