Never Miss a Beat - Get Updates Direct to Your Inbox
How Long Does It Normally Take To Sell A Website?
By Quiet Light
In the traditional world of mergers and acquisitions, to sell a business can be a 6-18 month proposition. Fortunately for those of us working in the online world, to sell a website doesn’t have to take nearly as long.
If your website is well positioned, your presentation materials are well organized, you have a pool of buyers at the ready, and your business’s value is somewhere between $100,000 – $1,000,000, it is reasonable to expect the sale of your business to take somewhere between 40 – 60 days. Of course, few websites are able to check all of those boxes.
In researching this question, we analyzed the amount of time it took from the initial listing to the final closing from a group of 50 Quiet Light Brokerage closings. When we look at the results, there is a distinct “double-hump” in the data.
Why does this “double-hump” exist? What does it tell us about our own business and the prospects of one day having our business acquired? Lastly, does this data really tell the whole story? (hint: it doesn’t)
Closing Time for 50 Quiet Light Websites For Sale
The graph below represents the amount of time required to close 50 individual acquisitions. We measured the starting time as the day that we made the listing public, and the end time as the day that the acquisition was officially closed (the “time to close”). We took the results for each of our 50 transactions and placed it into one of 5 categories: less than 30 days, 30-60 days, 60-90 days, 90-120 days, and 120 – 150 days.
Below is the result.
While we fully expected to see that a high percentage of our deals close during the 30-90 day window, and while we also knew that there were some websites that simply took a bit longer to close, what was surprising to see was a distinct “double-hump”. The 90-120 day period was surprisingly low compared to the other periods. Why is this?
A Matter Of Making Adjustments?
My first instinct at seeing this data is that there was too little data to form a conclusion. After all, 50 transactions is really not enough to draw any hard and fast rules.
That said, there is a possible explanation for this double-hump which is backed up by the experience of the advisors at Quiet Light Brokerage.
If a business does not receive suitable offers after a few months of being on the market, adjustments are usually made based on what feedback is available. These adjustments can happen at any time and can involve how we present the information or in the actual asking price of the business.
If we look at this in terms of the “double-hump”, we could say that a “normal” timeframe is 40-60 days, assuming everything is prepared correctly. However, if a business lasts two months without a suitable offer, we may see an opportunity to make a change to the listing in response to market feedback. From there, the “normal” timeframes kick in (although it takes a bit longer since the business has been on the market for a while already) and we see the uptick in closings falling in that 120-150 day range.
This Is How Positioning Impacts Price
This data emphasizes just how important it is to prepare your website to be well positioned for a sale.
Positioning your business for sale involves a lot of factors, but in general, it speaks to removing the common objections that cause buyers to take a pass on buying your business. It also guides your business into a position where it’s metrics are the most appealing for potential acquirers.
How well your business is positioned directly impacts both its price and also its time to sell. In the graph above, we can see that adjustments to listings seem to happen in a way that causes our “double-hump”.
Although there can be a lot of small adjustments to a listing, such as how information is being presented and what type of buyers are being targeted, the most common adjustment after two months without a suitable offer is to reduce the asking price.
For a business owner who made the tough emotional decision to sell their business, it can be discouraging to agree to a price-reduction. I know this personally as I did this with the business I sold before I started Quiet Light Brokerage.
This is why it is so important to take time and prepare your business for sale. You’ll reap rewards in both price and also the time to sale.
What This Data Hides – And It’s Important
If you request a website valuation from Quiet Light Brokerage with the thought that you are ready to sell your online business now, there is a significant chance that we will tell you to wait before listing your business for sale.
I asked our three main advisors to estimate how many potential clients they advise to wait before listing their websites for sale. Here are their responses:
Joe Valley: “I’d say of the quality businesses that ask for a valuation – I suggest to at least half of them that they should wait for one reason or another…I think about 75-80% of the one I suggest to wait – do. I know it’s that high because I need them to fix things that are broken or that will lead to a lower multiple that won’t be acceptable to them.”
Amanda Raab: “For the qualified websites ready to sell, I’d say I tell all of them to wait when it is warranted. I tell about 30% of the good websites that come in to wait for one reason or another. Generally, about 30 to 35% of them will wait and only half of those will actually work to fix the issues.”
Jason Yelowitz: “I probably tell about 40% of qualified [websites] to wait and probably 50% of them do wait.”
Why would we tell so many people to wait? Because positioning makes a difference in value.
When we perform a website valuation, it isn’t with the sole intention of signing up another client. Our goal is to provide information.
Our hope is that a business owner can make a good, informed decision about selling and what value they may gain by fixing their positioning. As you can see from the advisors responses, even though we tell a lot of people to wait, not everyone takes our advice.
So How Long Does It Take to Sell a Website?
From the time a business is officially listed for sale, if it is well positioned, then 30-90 days is certainly a reasonable expectation. The vast majority of transactions happen in this timeframe. For those few websites that require a price adjustment, it may take a bit longer to sell.
But if we start the clock from the time a business owner decides that they want to position the business for sale, our number could be drastically different. Positioning a business for acquisition is an intentional and deliberate process which simply takes time. It’s usually not difficult, but it can take time.
So why wait? Take some time today to evaluate what you would need to do to prepare your website for sale. If and when that day comes where you decide to sell, you’ll be happy you did.