Business Exit Planning Timeline: What Actually Happens in the Months It Takes to Sell

Selling a lower-middle-market business usually takes 6 to 9 months from the day you sign with an advisor to the day the money lands in your account. The selling itself is fast. About a week goes to building the marketing package, one to two months to getting an offer, and roughly three months to financing, legal work and due diligence. Exit planning is what decides whether those months run smoothly or stall.

This guide walks through that timeline week by week, shows where the time really goes, and covers what to have ready before you start.

Why selling a business is not like selling a house

The most common assumption we hear from first-time sellers is that a business sale works like a house sale: agree on a price, pick a closing date, done.

A business sale has far more moving parts. The buyer’s attorney and your attorney negotiate representations and warranties, a working capital target, the financial statements you are vouching for, licenses that need to transfer, work in progress, receivables and payables, and whether the deal is structured as an asset sale or a stock sale. Most buyers also use bank financing, so a lender is underwriting the business at the same time.

None of that is meant to scare you. It is simply why the process takes months instead of weeks, and why the work you do before you go to market matters so much.

The timeline at a glance

Week by week: from engagement to money in the bank

Before week 1: valuation and alignment on price

Everything starts with a valuation and an honest conversation about price. If your expectations and the market are far apart, it is better to learn that now than four months into a process. To start, we need three years of profit and loss statements and a current balance sheet.

The U.S. Small Business Administration’s guidance on selling a business covers the income, market and asset approaches used to value a company, and recommends bringing in a professional before you set a price.

Week 1: engagement and the marketing package

Once you sign an engagement agreement, you complete a seller questionnaire and we build two documents: a short blind teaser that describes the business without naming it, and a confidential information memorandum (CIM) that tells the full story with financials, operations and growth opportunities. You review and approve both before any buyer sees them. This part takes about a week when the financials are in hand.

Weeks 2 to 8: marketing, buyer calls and offers

The teaser goes out to a wide list of potential buyers. Interested buyers sign an NDA before they see the CIM, and access is staged so sensitive details are shared only as a buyer proves serious. We screen buyers on calls and introduce you to a short list of qualified ones to interview. Most clients receive an LOI within 60 days.

You choose which buyer to negotiate with. We negotiate price and terms with them until there is a signed letter of intent (LOI).

Weeks 8 to 10: the LOI and exclusivity

An accepted offer means a signed LOI, and with it comes exclusivity: a window, usually sixty to ninety days, where you work with that buyer only while they do diligence and line up financing.

Buyers almost always ask for the full ninety days. We learned the hard way not to grant it without conditions. On one deal, a buyer used nearly the whole exclusivity window and then walked away. The seller had already retired in his head and had to start over from the beginning. Exclusivity with no milestones is dead time for the seller and a free option for the buyer.

Now we tie exclusivity to milestones. If a buyer cannot produce a bank term sheet within about two weeks, exclusivity ends and the business goes back to the other interested buyers.

Weeks 10 to 22: financing, legal and due diligence

This is the longest stretch, and it surprises owners who expect to close soon after the handshake. In these three months or so:

• The lender underwrites the deal, which can include appraisals and life insurance on the buyer.
• The buyer’s accountants review your financials, often called a quality of earnings review.
• Both attorneys negotiate a purchase agreement that commonly runs thirty to fifty pages.
• You keep sending updated financials, because the buyer and lender will ask for them right up to closing.

It is focused hurry up and wait. The single most important thing you can do here is keep the business performing. Revenue that dips during diligence gives the buyer a reason to renegotiate. For how to manage both jobs at once, see Selling Your Business While Running It.

Closing day: money in the bank

Closing documents are signed, the lender funds, and the purchase price is wired. Your transition period with the new owner begins under the terms you negotiated.

Why “I need to be out in four months” is a problem

The timeline above is what happens when an owner starts from a stable position. It gets much harder when the clock is set by a crisis.

One owner called us about a specialty contractor run day to day by a single general manager. That manager did the work of two people: estimating, planning the jobs and running the field crews. Then the manager gave notice, and the owner called hoping to have the business sold before the notice period ran out.

That is the call we wish we had gotten two months earlier. A buyer and a lender are buying a business that runs. When the one person who runs it is leaving, the business a buyer would diligence in month four is not the one the owner is selling today. There is no version of the timeline where marketing, an offer, financing and diligence all fit inside a notice period.

The lesson is not to wait for a trigger. The time to talk about an exit is while the business is steady, the key people are in place and the books are current, because that is when you have the most options and the most leverage.

What to have ready before you start

The fastest sales are the ones where nothing has to be dug up mid-process. Before you engage, gather:

• Three years of profit and loss statements and a current balance sheet. These start the valuation.
• Filed tax returns, including last year’s. We can start the valuation and the materials from prior years, but nothing goes live with buyers until the most recent return is filed. You cannot sell what the bank cannot see: the lender underwrites from returns.
• Monthly financials you can update on a schedule. Expect to send them in a set format throughout the process.
• A list of add-backs with support: owner compensation above market, personal expenses run through the business, one-time costs.
• Key contracts and leases: customer agreements, supplier agreements, your facility lease and any equipment leases.
• Licenses and permits that a buyer will need to keep or transfer.
• A simple org chart showing who does what, and where the business depends on you.

Prepared seller versus reactive seller

Using the extra time well: an add-back example

If you have a year or more before you want to sell, the most valuable work is on your financials. Here is what normalization looks like for a hypothetical professional services firm that reports $420K of net income on its tax return:

Buyers value the business on normalized earnings, so every supported add-back is multiplied by the valuation multiple. Unsupported add-backs do the opposite: they get challenged in diligence and cost you credibility. Document them early with your CPA.

Other work that pays off over a longer runway:

• Reduce owner dependency. Delegate customer relationships, estimating and operations so the business runs without you.
• Address customer concentration. If one customer is more than 20 to 25% of revenue, adding even one significant account changes how a buyer sees the risk.
• Document your processes. Written procedures show the business is a system, not a person.
• Fix deferred maintenance and compliance gaps while you control the cost, not during diligence.
• Lock in key employees with retention agreements so they stay through the sale and the transition.

Move at your own pace

Nothing here has to happen on our schedule. We can move as fast as you want or as slowly as you want, and plenty of owners start with a valuation and take their time before going to market. What matters is that when you do start, you start ready.

For a full breakdown of how valuation works and what moves your multiple, see What Is My Business Worth?. For keeping the process quiet from employees and customers, see How to Sell Your Business Confidentially.