It seems every time we work with a seller, the owner believes they should be able to sell their business in a month.
We know where this comes from. 30 years ago many business transactions occurred with the current owner and the new owner shaking hands then creating a note between the two of them. Then a few days later the business changes hands.
Unfortunately in healthcare today this is just not possible. First, most owners want the majority of the purchase price in cash requiring the buyer to get a loan, second there are many regulations in place which require notifications and lastly the 3rd party contracts must be dealt with. Due to this, it usually takes 3-4 months for a business to sell from the time you find a buyer and agree on a price.
Below are our high level thoughts on a timeline. Some of these items will be done simultaneously
- Find a buyer – 1-6 months
- Agree on price (letter of intent) – 2-4 weeks.
- Buyer get financing approval – 4-6 weeks
- Buyer complete due diligence – 4 weeks
- Agree on purchase agreement – 4 weeks
- Complete notifications and closing process – 45-60 days