When owners ask “how long will this take?” they usually mean “when do I get my money?” The honest answer is: longer than you think, and the parts of the timeline you don’t control matter most.
The full timeline at a glance
| Phase | Typical duration | What happens |
|---|---|---|
| Pre-listing preparation | 1–3 months | Financial cleanup, valuation, CIM, data room |
| Marketing | 3–6 months | Teaser, NDAs, CIM distribution, buyer calls, offers |
| LOI & exclusivity | 30–60 days | Negotiation, signing, locking out other buyers |
| Due diligence | 45–90 days | Financial, legal, operational, environmental review |
| Closing | 15–30 days | Final docs, financing, escrow, wire |
| Total | 6–12 months | From listing to closed deal |
That’s the median. Faster is possible; slower is common.
Phase 1: Pre-listing preparation (1–3 months)
This is the work most owners want to skip — and it’s where the most value is created or lost. The faster you want to move, the cleaner your starting point needs to be.
- Books and add-backs: A QuickBooks file with consistent categorization can be normalized in two weeks. A messy file with commingled personal expenses takes two months to fix.
- CIM and teaser: Your broker writes these. Allow 2–4 weeks of back-and-forth.
- Valuation alignment: If your number and the broker’s number are 30% apart, you’ll spend a week reconciling before listing. Better to have this conversation now than after a buyer offers below your floor.
Phase 2: Marketing (3–6 months)
This is when your business is on the market and brokers are working their network and buyer databases.
- Weeks 1–4: Teaser distribution. Hundreds of NDAs come back from interested parties. The broker filters for serious financial capacity.
- Weeks 4–10: CIM goes to qualified buyers. You’ll typically get 5–20 buyer calls or meetings.
- Weeks 8–16: Initial offers (Indications of Interest). The good ones convert into LOI negotiations.
- Weeks 12–20: Final LOI selected, signed, and exclusivity begins.
If you’ve made it 16 weeks without a serious offer, the broker should be having a hard conversation about price or positioning.
Phase 3: Letter of Intent and exclusivity (30–60 days)
The LOI sets price, structure, and a no-shop clause that locks out other buyers. Negotiating the LOI is the most important moment in the process — once it’s signed, the buyer holds most of the leverage.
Major LOI elements:
- Purchase price and payment structure (cash at close, seller note, earnout, equity rollover)
- Asset versus stock sale
- Working capital target and adjustment mechanism
- Reps, warranties, indemnification, escrow
- Seller transition period and consulting agreement
- Exclusivity period (typically 60–90 days)
- Conditions to closing
A well-drafted LOI takes 2–3 weeks to finalize. Rushed LOIs cause re-trades and broken deals later.
Phase 4: Due diligence (45–90 days)
This is where most deals die — usually from preventable causes. The buyer’s lawyers, accountants, and operators verify every claim made in the CIM.
Common diligence categories:
- Financial diligence (often via a Quality of Earnings firm): bank reconciliations, revenue recognition, customer concentration, expense normalization.
- Legal diligence: corporate records, contracts, litigation, employment matters, IP.
- Operational diligence: facility tours, customer interviews (with consent), supplier visits.
- Environmental (for any property-using business): Phase I, sometimes Phase II.
Owners should expect to spend 5–10 hours per week answering diligence requests during this phase.
Phase 5: Closing (15–30 days)
Once diligence is complete and financing is approved, lawyers draft definitive agreements (Asset Purchase Agreement or Stock Purchase Agreement). This phase is mostly:
- Final negotiation of reps, warranties, escrow holdbacks
- Lender funding logistics (for SBA or bank-financed deals)
- Lease assignments and consents
- Working capital true-up at closing
- Wire transfers and signing — often electronic and same-day
What shortens the timeline
- Pre-arranged buyer. Internal sale to a partner, GM, or family member skips marketing entirely.
- All-cash buyer. Eliminates the 30–45 days of financing approval.
- Quality of Earnings already done. Cuts diligence by 2–3 weeks.
- Single-location, no real estate, simple structure. Fewer consents and assignments.
- Motivated, experienced buyer. Veteran acquirers know what they need and don’t get spooked by minor surprises.
What extends the timeline
- Customer concentration above 30%. Triggers extra customer interviews and contractual review.
- SBA financing. Adds 30–60 days, sometimes more.
- Real estate component. Triggers separate appraisal, environmental review, and title work.
- Multi-state operations or licensing. Each state’s licensing transfer is its own clock.
- Bad faith or distracted buyer. Some buyers slow-walk diligence to extract concessions; a strong broker recognizes the pattern.
The realistic expectation
If you’re a typical owner of a $1M–$5M SDE business with reasonably clean books and an experienced broker:
- Best case: 6 months from listing to closing.
- Median case: 9 months.
- Stretch case: 12–18 months if the first deal falls through and you have to relaunch.
Plan financially and emotionally for the median, not the best case. Owners who expect to close in 90 days routinely make decisions they regret when month seven arrives.
If you’re earlier in the journey — still deciding if now is the time — start with a confidential valuation. Knowing your number first makes every subsequent step faster.
