It Takes Months to Sell, But Years to Be Ready

How to Balance the Two Timelines in Mergers and Acquisitions 

How long does it take to sell a business? 

If you’ve ever searched the question online, you’re not alone. In fact, Google traffic for this exact inquiry is almost as high as it’s ever been. 

Owners are rightly concerned about how much of their life a transaction will consume, and how long they can expect between now and when they realize their goals.  

The quick answer, and the one you’d no doubt find on many websites, is that most company-sale processes take between six and 12 months from start to finish. In our more than 120 deals, we’ve had outlier cases run faster or slower, but most fall into this general range. 

That doesn’t sound too bad, right? But that period refers only to the window between process launch and the day the wire clears. It turns out that a comprehensive answer to the “how long” question should actually take into account two M&A timelines. 

When the process really begins 

The first timeline is the six to 12 months I mentioned, which has a distinct kickoff and close. You offer the business for sale, find a buyer, negotiate the deal, and sign a final purchase agreement. 

The second timeline includes your preparation window. This can begin years before you go to market and will largely determine how well and how quickly your actual sale process will run.  

The way the Class VI team and I look at it, your real timeline is your preparation window plus your go-to-market window, because we’ve found over and over again how important the first is to success in the second. 

By preparing thoroughly and strategically, you can shave down risks in your business and increase the chances of answering typical seller questions like these with a “yes”: 

• Will my sale go fast? 
• Will it close? 
• Will I achieve my goals? 

This last question is perhaps the most important. And with this one in particular, time is not always of the essence. 

The danger of speed for its own sake 

Though we at Class VI like to say that time kills deals, it’s also true that rushed processes can achieve some of the worst outcomes for sellers. Owners who just want to get a deal done—any deal—frequently compromise their leverage in one way or another. 

Sophisticated buyers can sense when an owner simply needs out now. Many will push a lower bid or less attractive terms than they would otherwise offer, because they know the entrepreneur is motivated to accept.  

Sometimes a concern with speed at any cost causes sellers to avoid professional representation, because they’re in too much of a hurry to vet an investment bank or other M&A advisor. These owners then enter a complex negotiation with no one to protect their interests. Disaster can ensue. 

Another pitfall, many entrepreneurs jump on an unsolicited offer from a buyer who makes an out-of-the-blue approach. Sadly, the result of these “one-offs” usually falls well short of market value.  

Even launching a process without taking enough time to button up the business can have significant consequences. Once the buyer you’re courting uncovers unaddressed flaws during due diligence, they are likely to retrade (i.e., change the initial offer). They could lower the price they’re willing to pay or take steps to reduce the up-front cash you will see, possibly by requiring an earnout or putting more funds in escrow. 

What the preparation window buys 

Time spent preparing for the rigors of M&A is generally time well spent. This is an owner’s chance to take guidance from an M&A advisor, make high-impact strategic moves, assemble a data-backed story with financial projections and other critical documentation, and explore a broad universe of potential buyers to increase the chance of finding a good fit. 

A well-prepared seller has leverage that hastier owners lack. You have the freedom to walk away from a bad-faith buyer when you know that other bidders await. What’s more, the work you put in beforehand usually results in fewer questions and less delay during due diligence, which in turn signifies less stress and a higher chance of closing the deal.  

It’s a classic case of going slow to go fast. Hope to beat the six- to 12-month timeframe most deals take? Prepare well. But also keep your goals in mind.  

The right timeline for you 

It’s important to recognize that processes can stretch, pause, or restart for good reasons, such as: 

• Waiting for a stronger quarterly performance before making a market debut 
• Reopening competition when a buyer overplays their hand 
• Walking away from a poor cultural fit 

Speed has its advantages, and you have every right to want to accelerate a deal process so you can get on with your life. But it’s important to keep speed in perspective.  

When you look back on your experience selling a business, you’re much less likely to care whether your process took four months or a full year than whether the result paved the way for the future you envisioned—for yourself, your family, and the business you created.  

It’s okay if you need a little extra time to prepare or if your process takes a detour on the way to a better result. As long as the outcome is rewarding according to the goals you set for it, you won the race. 

Putting in the early work 

The visible portion of the sale, from buyer auction to closing day, usually runs for a few months. But being ready to run it well takes longer, and that’s the time that tends to pay off in the end.  

I always advise developing a good working relationship with your deal team early on, because they’ll strive in the lead-up and all the way through the process to get you the best deal possible. This could be the relationship that matters most to the biggest financial transaction you’ll ever make.