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



Posted By: Joe Ranieri, Business Broker: LA, Orange Counties, California.   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.


Comments & Feedback From Pro Intermediaries & Pro Advisors On BizBen:

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: 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.




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.



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