Why It Might Be Hard to Sell Your Business

It can be very difficult to sell your business. This is one of the most challenging tasks a business owner can undertake, and only very few businesses sell successfully.

These are the factors that may make it hard to sell your business:

• It can be difficult to find buyers who are willing and able to pay the asking price for your business.
• Even if you do find a buyer, the negotiation process can be lengthy and complicated, often leading to frustration and even acrimony on both sides.
• Once a sale is agreed upon, there are often numerous legal and financial hurdles that must be cleared before the deal can be finalized. This process can take months or even years to complete, during which time the business owner may lose interest or motivation, or the buyer may back out altogether.

All of these factors combine to make selling a business one of the most difficult tasks a business owner can undertake. If you’re considering selling your company, it’s important to understand all of these challenges so that you can better prepare yourself for the task ahead.

Additionally, many business owners didn’t plan their exit. Owners do not think about selling until the time comes when they have to, whether it be due to an external or internally catastrophic event. This can often lead to a fire sale, in which the business is sold for far less than it is worth. To avoid this, it is important to have a plan in place for how you will sell your business well in advance. This will give you time to find the right buyer and get the best possible price for your company.

Keep in mind that selling a business can be stressful. Emotions are strong and can easily be exposed during a business sale. Fear is often the greatest emotion. It is often difficult to overcome the fear of uncertainty about how things will end up in the beginning stages of sourcing the right buyer.

The typical timeframe for selling a business is 6-9 months.

These five factors are important in determining the length of sales processes:

1. The size of the business: Small businesses typically sell faster than large businesses because they are less complex and have fewer moving parts.
2. The industry: Some industries are simply more active than others when it comes to mergers and acquisitions (M&A). For example, the technology sector has seen a lot of M&A activity in recent years.
3. The economy: In general, businesses sell faster in a strong economy than in a weak one. This is because buyers are more confident and have more access to capital in a strong economy.
4. Your motivation for selling: If you urgently need to sell your business, it will likely take longer than if you’re simply exploring your options. This is because buyers will sense your urgency and may try to lowball you on price.

If you succeed in selling your business, it can be worth it, though.

A business may sell for 2 to 4 times the seller’s discretionary earnings. The majority of businesses will sell within the 2-3 range.

So, for example, if annual cash flow exceeds $200,000, then the likely selling price is between $400,000-$600,000.