How long does it take to buy a business?
The process of acquiring a business is generally not a sprint, but a marathon. Most entrepreneurs are surprised to learn how long it actually takes to complete a deal.
The first formal stage is the identification, introduction and dating. You may have to search hard to find an enterprise that meets all purchase your criteria. When you do find one, it isn’t always easy to get in front of a business owner. You’ll have to learn enough about his business in a few meetings and determine if it is the right purchase option for you.
If a deal is to be had, the buyers will try to quickly move to the next phase, the offer. To secure a meeting of the minds regarding the core of the transaction (the infamous letter of intent to purchase or LOI) it can be days or it can require a couple of months.
Once the initial agreement has been signed off by both parties, it is common that the next phase, which includes steps such as due diligence, drafting of legal documents, accounting and third party authorizations, together call for another three to six months to coordinate.
The closing itself can be relatively fast, as little as a day or two however, often requires a week or so. Add to that the adjustments post-closing, the whole can trail on for an additional 60-90-120 days.
Therefore, as a rule of thumb, the transaction process can be done in four to six months but it general stretches on for close to three quarters of a year to a full twelve month period.