How Long Does It Take to Sell a Business? From Prep to Close

What business sale averages actually measure

A duration becomes useful when you can place its starting point and endpoint on your calendar:

Morgan & Westfield’s 10-to-12-month estimate spans the broadest sale period in this comparison. The firm allows one to two months for preparation, one month to more than a year to find a buyer, and three to four months for diligence through closing. The spread within those stages matters more to your calendar than the headline number.

Morgan & Westfield also reports that BIZCOMPS contains more than 13,000 U.S. business-sale transactions dating to 1996 and that transactions recorded since 2000 took an average of 200 days on the market. Most of the records involve smaller businesses, and almost all of the recorded sales used professional advisers. That 200-day figure measures time on market, while our 222-day median begins when the eventual buyer starts its pursuit. The figures belong to separate clocks.

Our two stage medians total 210 days, not 222. We calculated the 222-day median by adding both intervals for each deal and then ranking the 25 deal-level totals. A different deal can supply the middle observation for each individual stage, so adding the two stage medians doesn’t have to reproduce the median total.

Similar totals can also hide very different paths. One profile recorded 106 days before the LOI and 334 afterward, for a total of 440 days. Another recorded 294 days before the LOI and 137 afterward, for a total of 431 days. The profiles don’t identify the reasons for those differences, but they show why a total duration alone tells you little about where a transaction spent its time.

On your calendar, preparation, market launch, the eventual buyer’s pursuit, the LOI, signing, remaining conditions, and closing each deserve a separate date.

How long to prepare a business for sale before going to market

Work backward from your desired exit instead of adding preparation to a headline sale average. Axial recommends starting more than two years before that exit. A U.S. Chamber guide cites a separate recommendation of 18 to 24 months before going to market.

You can use that runway to build the financial history and explanations a buyer may request. The Chamber article says prospective buyers generally seek at least three years of financial information. Those three years describe the history you may need to present, rather than the time preparation itself will take. The article also names organized books, tax returns, normalized EBITDA with explained add-backs, customer-retention analysis, and growth initiatives as common preparation material.

The SBA identifies contracts, leases, the sales agreement, and purchase-price adjustments among the records a buyer may review. Your files, your advisers’ work, and any changes you want to make before presenting the company will shape the timetable. An early start gives you time to organize and explain the material, although it cannot guarantee a faster closing. Our sale-readiness guide covers that work in more detail.

How long it can take to find a buyer

Finding a buyer may be the least predictable part of the active-sale calendar. Morgan & Westfield allows one month to more than a year, depending on the buyer pool, price expectations, proposed terms, location, industry, financial trends, and preparation. You can improve the company’s presentation and reconsider price expectations or terms, but you cannot control the buyer pool or the wider market.

The 200-day BIZCOMPS figure starts when the business reaches the market and mainly reflects smaller-business transactions. Our 79-day median starts later, when the eventual buyer begins its pursuit, and ends at the LOI. A smaller-business owner may find the BIZCOMPS population more familiar, but its average still cannot set an LOI or closing date because it measures a different interval.

Our 25 closed-deal profiles also leave out time spent marketing to earlier prospects, pursuing buyers who dropped out, or running processes that never closed. A relatively short pursuit-to-LOI interval can sit inside a much longer search. Your buyer-search block should therefore begin at market launch and remain flexible.

If buyer response falls short of your plan, revisit the assumptions you can change and move the dates that depend on the search. Do not assume that diligence or closing will shrink enough to recover the lost time.

How long it takes to close after an LOI

An LOI starts a period that includes more than due diligence. The buyer and seller may negotiate the purchase agreement, conduct diligence, hold management meetings, coordinate employees and advisers, obtain approvals, sign documents, and satisfy any remaining closing conditions.

In a 2024 discussion, Orrick lawyers Mark Seneca and Justin Yi described 30 to 60 days from LOI to close as a basic target for a technology-company sale. They said LOIs commonly provide 30 to 60 days of exclusivity while the parties conduct diligence, meet with management, handle adviser and employee work, and negotiate the purchase agreement. Seneca described 45 days as a target and 60 days as typical when no regulatory or other delay intervenes.

The 25 Axial profiles took a median of 131 days from LOI to close. Orrick’s lawyers describe a timetable the parties may target, while our figure records elapsed time in 25 completed transactions across several industries. One figure doesn’t invalidate the other; they describe different bodies of experience.

The buyer may examine financial statements, tax returns, contracts, leases, the sales agreement, and purchase-price adjustments while both sides negotiate the purchase agreement. These workstreams often overlap, but each can affect the post-LOI calendar.

The buyer and seller sometimes sign and close on the same day. In other transactions, third-party consents, shareholder or other approvals, government waiting periods, regulatory review, or additional conditions create a gap. Until the parties satisfy those conditions, signing is another calendar marker rather than the endpoint.

The agreement’s exclusivity period does not set the closing date either. In 22 of the 25 Axial profiles, the LOI-to-close interval exceeded the stated exclusivity period. Among those 22 transactions, the median excess was 44 days. The profiles don’t establish how the parties handled exclusivity, but their dates show that the stated period did not determine the closing date in most of the group.

Diligence, purchase-agreement work, signing, and closing belong on the calendar as four post-LOI markers. They may overlap or coincide, but separating them prevents a short diligence estimate or exclusivity period from standing in for the whole interval.

What can delay a business sale

Different risks affect different parts of the calendar. Before market launch, missing financial history or unexplained adjustments can hold up preparation. During the search, a thin buyer pool or a gap between your expectations and the market can push the LOI further out. After the LOI, the buyer’s record review and the parties’ purchase-agreement negotiations consume time even when they overlap. After signing, consents, approvals, waiting periods, and regulatory review can delay closing.

The U.S. Chamber guide cites a practitioner who encountered tax issues during diligence that led to substantial sale holdbacks. When you uncover a problem during preparation, you have more room to investigate and explain it than you would after a buyer has started its review.

Some timing risks remain outside your control. You can organize records, explain adjustments, coordinate advisers, and reconsider price or deal terms. You cannot create buyer demand, make an outside party grant consent, or decide how quickly a regulator completes a review. Your contingency should reflect the stage carrying the greatest uncertainty rather than adding the same cushion everywhere.

The intervals also do not trade cleanly. A quick preparation stage does not create demand, and a short buyer search does not remove the work after the LOI. If one stage slips, move the dates that depend on it instead of assuming a later stage will shrink.

Build your calendar backward from the desired exit. For every quoted duration, record what starts and stops the clock, which stages it includes, and what experience produced it. Then allow contingency for the most exposed stage and for any conditions that may remain after signing. That turns “10 to 12 months,” “200 days,” and “222 days” into useful planning inputs rather than promises.