The marketing stage is the longest step in the sales journey for business owners. It helps to understand buyer response times when preparing for the sale of your company. In this review, we take a closer look at buyer response times as well as the marketing stage of a business sale overall.
How Long Does It Take for Buyers to Respond During a Business Sale?
To provide a full understanding of the sales process and what the seller can expect from potential buyers (including their response times and rates), we would like to explain the process in greater detail, which we do below. However, in simplest terms, it can take buyers anywhere from a week to more than a month to respond during the marketing phase of a business sale.
In some cases, a buyer may respond in as little as 24 hours after signing a non-disclosure agreement (NDA) and reviewing a confidential information memorandum (CIM). Although, it usually takes them much longer. Most interested buyers respond within a week or two if you have a justifiable asking price and/or are willing to negotiate. In some cases, buyers may take several months before they finally decide to respond to your inquiry.
What Steps are Involved in The Marketing Stage of a Business Sale?
There are several steps you must take before you sell your business, such as a professional business valuation, planning your sales strategy, and preparing your sales documents. However, once the market stage begins, you can expect to follow a similar process as the one discussed below.
Your Confidential Information Memorandum (CIM)
A confidential information memorandum displays the important details of your company, such as your financial information, growth areas, business processes, employees, and more. A CIM does not display specifics of your company, such as your business name or location, and potential buyers must sign an NDA before they view it. A confidential information memorandum may take approximately a week to prepare.
Inquiries With Potential Buyers
The next step is getting your CIM in front of potential buyers who are qualified and likely interested in purchasing your company. Your business broker handles this process for you by leveraging databases, connections, contacts, and networks.
Waiting for a Response From Potential Buyers
Buyer response times take between a week to more than a month in most cases. In the meantime, your broker should continue seeking a buyer. Ideally, you receive a fast response from multiple potential buyers, which can possibly lead to competing offers and leverage during negotiations.
Meetings, Negotiations, and Offers
In many cases, qualified potential buyers request to meet with the business owner. This allows them to learn more, find out how involved the seller would be in the transition of the company, and more. Negotiations take place, which can also take anywhere from several weeks to more than a month. Lastly, a deal is finalized and the buyer signs a letter of intent (LOI) that establishes the terms of the purchase and initiates the start of the due diligence stage.
How Long Does It Take to Secure a Deal With a Qualified Buyer?
It can take several weeks to months to prepare your company for the marketing stage, assuming you are satisfied with your current value. From there, the marketing stage overall may take between three and six months. This includes buyer responses, which typically take several weeks; negotiations, contingency planning, and securing a deal with a signed letter of intent (LOI) are included in the process as well.
Are You Planning Your Exit Strategy? Sigma Mergers and Acquisitions Can Help
Sigma Mergers and Acquisitions help clients sell their company for an optimal price and in a timely manner. We have access to hundreds of qualified buyers and leverage our various sales channels to secure a deal. If you would like to learn more and receive a free, no-obligation business valuation, contact us today.
