Selling your business can be a lengthy process with a lot of moving parts. Thousands of small businesses are sold in the U.S. every year. If you want to sell your business fast, what’s the best way to do it?
Every business sale is different. There’s no hard or fast rule for how long it takes.
Some sales require external professionals, like lawyers, accountants, or tax advisors. Deal structure, finances, and the market will affect the process, timing, and outcome.
If you’re a small business founder who has decided it’s time to move on, you may find your business is too small for private equity or venture capital. But finding a direct buyer can be a time-consuming and costly process.
It typically takes six to 12 months to sell a business. Here’s how you can speed the process up, or at least streamline it. (If you’re selling a Shopify business, a sale can happen in as little as a few weeks.)
Is now a good time to sell your business? You've invested so much time and effort into starting it. Are you sure you want to sell it?
It's essential to be clear about why you're selling:
If you’re considering selling your business on a tight turnaround, potential buyers will be curious as to why. However, if your company generates a stable profit, has a significant number of customers, or long-term contracts that guarantee its consistency in the future, buyers will consider it attractive regardless of your reasons.
Figure out if this is 100% what you want to do and why. If you’re in doubt, then maybe it’s not the time to sell. If you have a Shopify store, there are other options.
How would you begin to sell a business quickly? We have prepared a comprehensive guide, but in short, here’s what you need to do first:
The performance of your business is one of the most important aspects potential buyers look at when considering a purchase. You'll need to show your balance sheet, cash flow, profit, and loss. These provide a clear picture of your business’s financial health, profitability, expenses, taxes, and cost of goods sold. Ideally, prepare the last two to three years worth of these documents.
If your business is profitable, make sure that’s clear. Or, if you’ve automated your operations, be sure to highlight that. Some buyers may not want to be actively involved, but want a business that essentially runs itself.
This step is also key for identifying areas that could be improved in order to sell your business quickly at
the highest price:
Once everything is in check, you’re in a stronger position to sell and garner a more attractive offer.
Remember, you don’t have to wait for the ‘right time’ to sell. Instead of waiting for a seasonal sales boost, use the time to prepare your business for sale so that you’re ready to act when needed. A savvy buyer will consider your overall performance, growth trends, and profit margins, including seasonality and a current market downturn.
The value of your business reflects its potential, not the money and time you've put into it. It largely depends on how well it has performed in the past, how well it’s currently performing, and what the outlook for future performance looks like. That’s easier said than done. Try to avoid including your emotional investment in your business when considering your asking price since buyers won’t include this in their decision.
You can calculate your business' value based on various methods: here’s a discussion of three specifically for e-commerce businesses.
A fast method is to calculate your net present value (NPV), or the difference between the current income and current expenditures over a period. This figure can show potential buyers the profitability of your business.
The NPV is the outcome of computations performed to determine the current worth of a prospective series of cash flows. You can calculate NPV with the following equation:
NPV = [Current value of future cash flow] — [Current value of cash expenses]
It’s common for prospective buyers to ask for the NPV to calculate the profitability of a particular investment based on the assumption that a dollar now is potentially worth more than a dollar in the future.
As a baseline, try to take into account profit margins, competitive advantage, customer acquisition cost, revenue stream diversity, brand value, and market conditions.
How to sell your business quickly, at the highest price: provide as much information as you can, because factors that will impact the value of your business include:
To back up your valuation, consider sharing the following (but make sure you have appropriate non-disclosure agreements in place):
It’s essential to take all factors into consideration when deciding on the value of your small business, but aim to remain objective. Once you’ve got a number, consider double-checking it with financial advisors, brokers, or other entrepreneurs and experts in your field.
Brokers mediate most traditional business sales. Brokers work with a network of buyers. They communicate new deals with their buyer contacts, and present you with options if they believe your company is a good fit for what their buyers are looking for.
Finding a good broker in your industry can be a long and exhausting process. You'll need an expert broker who will consider every factor and come up with a fair price for your company — not too high, and not too low. Your business network can be a good source to find a good, certified broker. However, before choosing a broker, check their track record.
Brokers will also ask to see the detailed documents and plans that you gathered in preparation for the sale. This helps them match you with a buyer that’s interested in your business.
Consider choosing a broker that understands your personal reasons for selling the company. They need to be compassionate throughout the process. You’ve put in a lot of time and effort into the business that you’re selling.
Finally, if you decide to hire a broker, keep in mind that there are some drawbacks. We spoke to OpenStore’s Frank Kosarek who has worked with thousands of e-commerce merchants who were looking to sell their businesses:
“Some founders spend six months or more fielding ‘interested’ buyer calls, only to realize that most people have just been tire kicking and have no intention to buy.”
While brokers take on the hassle of advertising your business, finding a buyer, and handling the legal work, they don’t do it for free. Frank continues:
“Another major problem with selling through a broker is that fees can be 10-15% of your entire purchase price. No offer is guaranteed and, if you’re able to sell, the process traditionally takes months before receiving liquidity.”
In addition, some brokers charge fees even if you sell without their help later. So, carefully consider the brokers you engage with and the agreements you sign.
Not all brokers are experts in your specific industry or understand the unique aspects of your business. If your business operates within a specific niche, you might not be a priority for the broker, making the selling process longer and more difficult.
Brokers also often use simplistic business valuation methods that could potentially over or undervalue your business. And ultimately, brokers will typically prioritize their own interests with their long-standing buyer networks over yours.
In all cases, we recommend hiring your own legal and accounting professionals to help you with things like financial statements, non-disclosure agreements (especially if selling to competitors), audits, business valuations, and the handover process.
Your accounting records disclose your company's prospective worth to a buyer by documenting its history of success. We touched upon this earlier, but here is where you really need to focus on the financials.
Your records should be reliable and precise. A potential buyer will be able to analyze your financials more quickly if you provide correct and current information. It's also critical that your records follow the relevant accounting guidelines so that your financial statements can be compared to those of other businesses.
If you’re wondering how to legally sell your business fast, we spoke to lawyers and pricing specialists to bring you the following guides:
Here we are, the moment that all of this preparation has been leading to. Work through your options and assess the best offers from your shortlist.
Allow some room for negotiation to get a deal you’re happy with. Make sure all agreements are formalized in writing.
Then, finalize handover terms, transfer ownership, and provide post-sale support if needed. The smoother the transition, the more confident the new owner will be in running your business.
When the process of selling your business is over, you'll need to figure out how to manage the earnings. Make a financial plan and understand tax implications that may arise as a result of your income (tax considerations when selling an e-commerce business).
Consider consulting a financial adviser about investing your money and developing a retirement plan. You want to enjoy whatever comes next.
If you're on Shopify, there’s a significantly easier and faster way to sell your store. These seven steps are usually part of the typical process when you want to sell your business and could take six months or more.
But OpenStore has a way to reduce the entire process:
It only takes a few minutes to request an offer and it doesn’t require all the preparations and housekeeping work of the traditional process we discussed. Frank explains how:
“Unlike traditional sales processes, OpenStore takes a scientific approach to pricing businesses to ensure our offers are objective, fair, and can be guaranteed throughout closing. The custom-built pricing engine produces objective business valuations based on traditional and non-traditional metrics, such as Shopify sales data and the relationship that brands have built with customers.
What’s more, OpenStore seeks to grow each brand and retain the brand name. Founders can see the brands they bootstrapped and built grow further, and rest easy knowing that OpenStore won’t sell their company for a quick profit.”
OpenStore’s reliable tech and experienced team can provide you with a fast process that will empower you for the next chapter of your life.
You don’t have to be looking to sell your Shopify store to use this form — just follow our simple steps for a free valuation: