It's important to remember that selling a business takes time. Unlike selling a house, which can be sold relatively fast, a business can take up to six months to a year to sell. Everyone needs some sort of shelter, but not everyone has the desire or opportunity to own their own business and so the pool of buyers is smaller.
When I take a business listing, I usually take it for a minimum of six months. Six months, because it takes a tremendous amount of time and energy to find the RIGHT buyer. Pricing the business to sell is important, because the first 30-45 days is when the business has the greatest exposure, since it is so new on the market.
1. Finding/Working With The Buyer
I find many sellers don't understand how much work goes into selling a business, because they simply donít see it. The sellers donít see how many meetings I have had with buyers, which can last for up to thirty minutes to an hour, as I sell their business. The sellers donít see how I help the buyers create a financial/business plan for submission to the landlord or help negotiate the lease options.
2. Escrow Period
Itís important that the listing contract takes into consideration for the escrow period, which can be lengthy. A business can sell in ninety days (rare), but the escrow period will be a minimum of 45 days, and more like 60-70 days. In the escrow period, we do the searches on the seller for outstanding debt, get the lease in place, and transfer a liquor license if there is one.
3. Protects Broker's Commission
It doesnít happen often, but it does happen, and so we as brokers must protect our expenses and cost of service. If you have a short listing, potentially a buyer who you have procured and your seller could run out the clock on the listing, and attempt to do the deal without you. There are legal recourses we as brokers have, such as putting a claim in escrow or using the courts.