Making the decision to buy a business is a big one, especially for first-time buyers. And it's also very exciting - the idea of being your own boss, taking those first steps to entrepreneurship, or generating more income are all appealing goals.
In that excitement, however, it's important to remember that the actual business acquisition process can be pretty lengthy. (This isn't one-click Amazon ordering.) There are a lot of steps to get you to the finish line, including research, market analysis, due diligence, securing funding, and negotiating contracts. Managing your expectations from the starting block will keep you from getting discouraged along the way if it ends up taking longer than you initially imagined it would.
There's no one-size-fits-all answer to this question, but on average, you can expect it to take anywhere from 6 - 12 months. That might seem like a long time (and it is), but remember, this is a big undertaking, and it should take as long as it needs to. Rushing through this process will only end in regret.
Because no two deals are alike, a variety of factors will influence this timeline. Here are four areas that can have the most significant impact on the speed of becoming a business owner.
Unless you've already pinpointed the business you want to buy, allow yourself 2-3 months in the research phase. You need to consider the industry you're interested in, how you want to operate (for example, brick-and-mortar or e-commerce), geographic location, purchase price, and more. Once you have that criteria established, you'll need to do a scan of the market and start identifying businesses for sale that are a good fit. Again, don't rush through this process. Take ten or fifteen of your favorites, make a pros and cons list, compare the sh*t out of them, and then see which ones are left standing.
Here's another area you shouldn't rush (do you notice a theme here?). On average, due diligence typically takes 90 - 120 days. Think of this as an extension to the research phase, but on a more granular level. Once you've identified the business you're going to purchase, it's now time to collect and analyze information on their finances and operations in preparation for entering into a contract of sale. Remember, if you take over this business, you are inheriting everything, and that could include unhappy employees, vendor debts, and outdated equipment. These factors should be considered when assessing the company's actual value (factors that can be used to your advantage to negotiate a better price, we might add).
This is sort of obvious, but it is single-handedly the number one influence on the business-buying process. If you're someone who just wants to wait for the perfect deal to fall into their lap, or you're only willing to make half-hearted attempts to locate and analyze potential businesses to buy, there's a good chance you may never see your dreams of ownership come to fruition. Nobody will be holding your hand and dragging you to the finish line; you have to pull up the proverbial boot-straps (or lace up the tennis shoes if we're keeping with the race analogy) and put in the work.
Another biggie, as it's one of the factors that's entirely outside of your control. A motivated seller should put forth equal parts energy and effort into closing a deal with the right buyer. If you have a reticent owner who is less than enthusiastic about releasing information about their accounts, operations, etc., it's only going to drag out the process. (And frankly, this probably isn't the type of seller you want to get into business with anyway. For more on that, read this post.)
The thought of spending the better part of a year completing the myriad of steps it takes to acquire a business can feel overwhelming - and maybe a bit discouraging. It'll be easy to let the initial excitement burn out, and somewhere along the way, you'll want to throw your hands up in the air and just say, this is taking too long; screw it. Just remember, you don't get prizes for finishing first. Let it take as long as it takes. Keep your focus on why you're doing it in the first place, and the arbitrary timeline you've built up in your head will begin to matter less and less.