How long does it take to buy a business?

investor profile

September 24, 2021

by an investor from INSEAD in Singapore

According to the Stanford 2020 study, the average duration of a search is 23 months.

However...

The time elapsed between launching the search and stepping into that CEO seat will ultimately depend on the following:

Time allocation

Appetite

Yield

Partners

Luck, of course


  1. Read the full post here: https://www.smeventures.com/insights/how-long-does-it-take-to-buy-a-business

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commentor profile
Reply by an intermediary
from The University of Michigan in New York, NY, USA
How long does it take to get married? Well of course there is no real answer for that. However the broader your network and the more deal flow you see the more chances you have of finding a deal (also in your romantic life).

A potential trap and big lesson I have learned was on a private equity deal where we negotiated the asset purchase agreement for almost one year. The deal closed but if it had fallen through we would have wasted one year and incurred significant legal costs for nothing. So I think it is very important to keep things moving along once you are serious.
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Reply by a searcher
from Western Michigan University in Grand Rapids, MI, USA
I find the time reported interesting but not surprising. If you have enough coversations with enough searchers, you can see how so many get hung up in the process. There is no universal solution because the issues vary widely but you can always work with someone that can help reduce those issues.

Or you can keep looking for a $2M-$5M EBITDA company with a strong management team in a high growth industry with an owner that is willing to sell at a below average multiple.
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