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How Many Months Should I List My Business With A Business Broker?

Comments & Replies: 4     Views: 8618     Posted By: Joe Ranieri  Joe Ranieri, Business Broker: LA, Orange County Areas

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. I discuss this topic with other advisors and intermediaries on this BizBen Discussion.

Topics: Business Brokerage, Selling A Business     Tags: business brokers, selling a business



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 don t see it. The sellers don t 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 don t 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

It s 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 doesn t 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.

Contributor: Broker/Consultant: Elderly Care Services

How long should you list your business for sale with a Business Broker?

Well that depends. In my opinion and from my experience, the listing time period really doesn't matter, it all boils down to the Sellers motivation, the Brokers motivation and the 2 parties ability to communicate effectively and have realistic expectations of one another.

The last thing a Broker wants to do is to take a listing that will not sell or is coupled with an unrealistic, non-motivated Seller. Taking listings is expensive and very time consuming.

On the other hand, for Sellers, working with an unmotivated and uneducated Listing Agent is a waste of time, very frustrating and can potentially damage the business.

So before you go and take a listing or commit to work with a Business Broker make sure you can communicate well with each other and have realistic goals and expectations.

Contributor: Business Broker, Inland Empire Area

Many of the important points have been addressed in this thread as to why is it important for all parties involved to get into an exclusive listing agreement, I agree with most of them.

In my opinion, the length of the listing agreement depends on the type of Business that is for sale and is generally between 6-12 months. While a franchise restaurant or a gas station might find a buyer quickly (and then there is additional time for the actual sale procedures like due diligence, lic. transfer and escrow), a specialized medical practice, or a business that repairs refrigeration on truck and trailers will probably take a lot longer to find a buyer as there is specialized knowledge/ skill set required to operate those businesses and there are limited buyers for them.





  Helpful Resources To Assist In Selling And Buying California Businesses
Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

Shalonda Chappel-Pilgram: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Brad Steinberg, Business Broker: Laundromat Specialist

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.


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