A recent survey revealed the following about the length of time that selling an average business requires:

It took from four to 12 months to sell approximately 82% of businesses, with 38% percent falling into the seven- to nine-month range. Of course, some businesses sell more quickly (even in New York), but at the other end of the spectrum, over 8% are on the market for over 12 months. 

Why does it take so long to sell a business?  In general, price and terms are the biggest reasons.  Not over-pricing the business at the beginning of the sales process can shorten the cycle, as well as a transaction structured to include a reasonable down payment with the seller carrying the balance.  Having all of the necessary information at the beginning of the process can also greatly reduce the time period.  Being prepared for the information a buyer may want to review or having the answers available for the questions a buyer may want answered is the key.

Here is the basic information that should be made available to a buyer:

• Financials for the past three years.
• The lease and any assignments of the lease from previous sales.  This is particularly important for businesses in New York City. 
• A list of the fixtures and equipment that will be included in the sale. Note: If something is not included, it is best to remove it prior to the sale or at least have a list of items not included.
• The franchise agreement if applicable or any agreements with suppliers or vendors.
• Any other documentation pertaining to the business.
• Supporting documents for patents, copyrights, trademarks, etc.
• Sales brochures, press releases, advertisements, menus or other sales materials.

In addition, here are some of the questions that buyers may have.  A prepared seller should have ready answers as well as the information to support them.

• Is the seller willing to train a new owner at no charge and will the owner be staying in New York?
• Are there any zoning or local restrictions that would impact the business?
• Is there any pending litigation?
• Are any license issues involved?
• Are there any federal or New York state requirements, or environmental OSHA issues that could affect the business?
• What about the employee situation? Are there key employees?
• Are there any copyrights, secret recipes, mailing lists, etc?
• What about major suppliers or vendors?

A prepared seller is a willing seller, and having the answers to the above questions can significantly reduce the time it takes to sell a business in New York, Connecticut or New Jersey.  Using the services of a professional business broker like the Inbar Group can also greatly reduce the time period.  We are knowledgeable about the current market in New York and the surrounding areas, how to market a business and they can advise a seller on price and terms.  We can also recommend professional advisors in the New York area, if a seller doesn’t have them already.  Using advisors who are transaction-experienced can also shorten the time it takes to close the sale.