- How long does it take to sell a business?
The timeline for selling a business depends on various factors, including the industry, market conditions, and business size. On average, Main Street businesses take 6-12 months to sell, while lower-middle market businesses may take 12-18 months or more. Larger businesses with more complex structures typically require more time for due diligence and deal structuring.
- What can I do to increase the value of my business before selling?
To maximize your business’s value, focus on improving your financial documentation, streamlining operations, and ensuring that your business has a strong customer base and growth potential. Nevada M&A provides pre-sale advisory services to help you optimize your business’s appeal to potential buyers.
- What are the costs associated with selling a business?
Typical costs include broker fees (usually a percentage of the sale price), legal fees, and sometimes closing costs. Nevada M&A will provide a full breakdown of any costs upfront so there are no surprises.
- What are the tax implications of selling my business?
Taxes can significantly impact the net proceeds from your sale. Factors like capital gains taxes, depreciation recapture, and state tax regulations need to be considered. We recommend working with a tax advisor to fully understand the implications based on your specific situation.
- Why should I sell my business with a broker or advisor instead of doing it myself?
Selling a business is a complex process that requires specialized expertise. A business broker or advisor ensures your business is priced correctly, marketed confidentially, and presented to qualified buyers. They manage negotiations, handle paperwork, and guide you through due diligence to secure the best deal with minimal stress.
- How many businesses fail to sell when listed directly by the owner?
Studies show that a significant number of businesses—up to 80%—fail to sell when owners try to manage the sale themselves. This is often due to improper valuation, lack of access to qualified buyers, or inadequate preparation. Brokers and advisors dramatically increase the likelihood of a successful sale.
- How far in advance should I start preparing to sell my business?
Ideally, you should start preparing 1-3 years before you plan to sell. This allows time to organize financials, streamline operations, and improve profitability, which can significantly increase your business’s value and attract better offers.
- How will confidentiality be handled during the sale?
Maintaining confidentiality is critical to protecting your business during the sale process. Brokers use non-disclosure agreements (NDAs) and vet buyers thoroughly to ensure only qualified individuals gain access to sensitive information.
- What documents do I need to sell my business?
You’ll typically need 3-5 years of financial statements, tax returns, a list of assets, lease agreements, employee contracts, and other operational documents. A broker can help you compile and organize these records.
- What is my business worth, and how is its value determined?
Your business’s value is based on factors like revenue, profitability, industry trends, and market conditions. A broker or advisor will perform a professional valuation to determine a fair market price and maximize your return.
- How long does it take to sell a business?
The process usually takes 6-12 months, but it can vary depending on factors like market demand, business size, and preparation. Starting early and working with an advisor can help shorten the timeline.
- Do I need to tell my employees that I’m selling?
In most cases, it’s best to keep the sale confidential until later stages of the process to avoid disruption. Your broker will advise you on the right time and approach to inform employees.
- How much does it cost to sell my business with a broker?
Brokers typically charge a success fee, which is a percentage of the final sale price. This fee varies but is usually in the range of 8-12% for small businesses. It’s important to discuss fees upfront to understand what’s included.
- What happens if I decide not to sell after starting the process?
If you choose not to sell, a good broker will respect your decision and provide feedback on how to improve your business for a future sale. Preparation efforts often strengthen your business operations and value, even if you don’t proceed.
