We are often asked what makes a deal successful? We decided to share our thoughts and experiences to help buyers and sellers have a more successful deal making process.
This blog is for informational purposes only. This blog is not legal advice, and no attorney – client relationship is intended or formed by this blog. For more information or to contact an attorney at Foreman Law, please email firstname.lastname@example.org.
How long will the deal process take?
Time kills deals, but it doesn’t have to. If you understand your deal process and plan well, you’ll give yourself a great shot at keeping your deal on time and on track.
The deal process can take years if you are preparing to sell your business. Generally, it will take longer for the seller than it will for the buyer. There is almost always a way to get the deal done in a certain timeframe, if you have the right team, and catch a few breaks.
Generally, plan on at least 6 months for the whole deal process, although some deals can get done in as little as 30-60 days.
Preparing for the Deal
- Building your team – It can take weeks or months to build the right team. Start early so you are not in a rush.
- Finding a buyer or seller – This process can take months or even years. Talk to people who have experience with selling a business so that you can start to gauge how long it may take.
- Initial negotiations and diligence – Plan on at least a few weeks for this process once you find the right buyer or seller.
- Planning for timing with third parties –Understand the timing needs and process for key third parties whose involvement is necessary to get the deal done (e.g., banks, investors, landlords, key parties who must consent to the deal). Make sure you understand how changes can affect their process, so you avoid having to repeat approvals, etc.
Doing the Deal
- Initial terms/LOI/Term Sheet Plan on a few weeks to negotiate and get all of the key terms ironed out.
- Financing – The funding process will often overlap with other phases, and should be timed out so that it doesn’t end up causing a delay. By itself it can take a month or more depending on what type of financing it is.
- Additional negotiations and diligence – Some form of negotiations and due diligence goes on up until closing in many deals.
- Documentation – Drafting and negotiating the documents can take a several weeks to a several of months depending on how much negotiation is involved, and how complicated the documents and relationships are.
Finishing the Deal
- Closing – Closing is usually a one-day event or less once all the pieces are in place.
- Post-Closing – This is where the real work begins for the buyer. The seller’s obligations and responsibilities after closing can take anywhere from several weeks to several years depending on the kind of obligation
Jacob’s Thought – Be realistic on your timeline. It is going to take more time than you think. It’s probably not going to happen in weeks. Be patient.
Sam’s Thought – Plan margin into your deal process. Don’t max everything out. Leave room for the unexpected and protect time for what matters most in your life.
Wellness Tip – Plan for self-care. Build it into your timeline. Take a walk, have family time, go fishing, play golf. SLEEP. If you take care of yourself, you will be able to think more clearly and make better decisions. It’s hard to do well if you aren’t well.