Exit Planning Strategy, with David Tobin
The Agency Profit Podcast
Considerations for Planning the Timeline of Selling a Company
Planning a timeline for selling a company requires a considerate approach to the runway needed for the sale. A three to four-year timeline is often recommended, starting with an average six to twelve month period to finalize the sale, followed by a potential two to three year post-closing earn-out period where the seller must ensure the company's financial performance aligns with agreed terms. This extended timeline can create challenges as business owners may weigh the financial benefits of selling against the possibility of retaining ownership and managing their business independently. The complexity increases when factoring in the requirement to collaborate with the buyer after the sale, which can complicate the decision-making process. Additionally, financial sponsors often operate on a longer timeline with a strategy for liquidity events, suggesting the need for even further foresight when planning the sale of a business.
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