What Happens After You List Your Business For Sale?
You have taken the leap and listed your business for sale. Congratulations! It takes a certain level of courage to get past the fear of the unknown and put your business on the market. So, what happens now?
You Are In Control
First things first - putting your business on the open market opens the door for new possibilities, but you remain in control. Listing your business is an invitation for buyers to inquire about its details and potentially make you offers, but you are not obligated to entertain any that don’t meet your financial goals or other criteria.
In many ways the listing is a way to sample the market and start accumulating feedback to better understand what your business is worth to third-parties, and the appetite for business acquisitions in your market.
If you’ve engaged a business broker, they will be managing your listing and vetting buyers, but it’s helpful to understand how the process plays out. If you haven’t already done so, be sure to download our eBook, Guide to Selling Your Business, for a step-by-step guide to the process.
The First Week: Brush Up Your Published Listing
After you’ve published your listing and spent some time evaluating how it stands up to, or stands out from, other similar businesses, you may find that you have some ideas to better position yourself. This is common - so common in fact, that the term on your BizBuySell listing doesn’t start for one week after you’ve started it. This gives our business sellers some extra time to fine-tune the listing title, images, and description copy to better reflect their unique business offering and stand out from other business sellers.
(To get some tips on how to improve your listing, see 10 Steps for Creating a Successful Online Business-for-Sale Listing.)
The First Month: Refine Your Inquiry Replies
If you start receiving inquiries right away, that’s great news for you! But it also means you may want to start implementing some vetting procedures early on. At the very least, you will want everyone who contacts you to sign an NDA before providing any additional information. Experienced business buyers will probably open communication by offering to sign an NDA before moving forward.
Some business sellers will also ask for "proof of funds" to weed out people who are not in a financial position to move forward with a purchase. Depending on your situation, you may want to add such a stipulation to limit the time you spend engaging with prospects unlikely to advance. Again, an experienced buyer will be prepared with such a document, generally provided by their bank. You just want a recent bank document or bank letter with the buyers name, amount of liquid funds available, and the bankers contact information.
What's Next?
Business for sale listings receive 3-4 inquiries per month on average, and the typical sales timeframe is six to nine months, but there is no “average” business. Some businesses may receive 10+ serious purchase inquiries every month, while others receive just a handful over the course of a year. It all boils down to the specifics of the business, the local market, and the aggressiveness of the marketing effort.
As a result, some business sellers may go months without a bite to respond to. Others may be kept busy fielding many inquiries and vetting many potential buyers. To help illustrate, following are some experiences from business sellers in a variety of markets with their own unique circumstances:
A Fast Sale
Bakery in Chino, CA
30 Days - $115,000
"After six months with not one single viewing appointment, we decided to take matters into our own hands."
After Daniel and Jenny Ramirez found that their business broker wasn’t cutting it, they listed their bakery business for sale directly. Within a few weeks they had “half dozen prospects and 3 firm offers”. 30 days after listing their business for sale, the deal was done. See their success story here.
Many Offers for a Discerning Seller
Preschool in Texas
3 months - $1,000,000
"I had to consider what the community and our existing families at the school would want in my successor"
Joanie Keays wanted a great preschool for her children, so she started one. Once her children were older and she no longer had the desire to grow the business, she decided to list it for sale. Within 30 days of listing the school for sale, she had over two dozen serious inquiries. But Joanie wanted to make sure she left her business in the hands of someone qualified to run and grow it, and care for the children the business served.
After carefully interviewing potential buyers, she sold the preschool to someone she felt would care for it as much as she did and take the business to the next level. Read her story here.
A Long Process for a Ghost-Town Gift Shop
Gift & Candy Store in Arizona
1 Year+ - $750,000(asking)
If location is an important factor in a retail business, nobody told the owner of Mother Lode Mercantile. This unique gift shop and candy store is located in a ghost-town and serves tourists to the desert location just outside the greater Phoenix area.
The shop finally sold after over a year of marketing effort. The unique nature of the business and its location made finding a qualified buyer an exercise in patience and perseverance. See the business here.
Listing During a Pandemic & Pivoting to Sell to Employees
Catering Business in San Francisco
3 months - $(Not disclosed)
"One of Kearney's biggest concerns in exiting was the security of her staff, and after negotiating with multiple buyers, she knew the solution. She'd sell it to her employees."
Thanks to some smart and creative business moves, Kelly Kearney managed to keep her catering business afloat when the world locked down due to the Covid-19 pandemic. Personal circumstances led to her decision to list her business for sale in the summer of 2020, and it only took a couple months before she was in discussions with three serious buyers.
Concern for her staff led Kelly to call off negotiations with the buyers, and sell the business to her employees instead. Read Kelly’s story here.
Levers to Affect Your Business Listing Visibility
You have some options to affect how widely your business for sale listing is distributed, and how many buyer prospects are made aware of it.
Geographical Targeting
Many business owners use broad geographic regions to prevent their specific business being identified. For example, it’s common to limit the location information of a business to its county or state. While this can add a layer of secrecy to your business listing, it comes at the expense of visibility to buyers searching for businesses by city.
Adding more specific geographical information will ensure your business for sale listing is included in more searches, therefore increasing its visibility, and drawing more potential buyers.
Advanced Placement Options
If you determine you need to expand your reach to drum up more interest, the BizBuySell platform can help you reach more buyers with a variety of advanced advertising and marketing tools. You can increase the visibility of your listing by purchasing larger and more prominently positioned ad types, as well as tap into engaged buyers via targeted email distribution. To learn more, see our Seller Products page.