This is how long it will take to sell your company, and why investing in professional advisors pays off

You already know that deciding to sell your business is as much an emotional journey as a financial one. Once you’ve cleared that hurdle and feel personally ready, the next big questions are: How long will it take, what will it cost, and should you hire a professional team of advisors to guide the process?

Typical timeline:

Selling a privately held business typically takes 9 to 15 months from start to finish, depending on transaction complexity and readiness.

Pre-engagement preparation(3 to 6 months)

• Building your team of advisors, conducting quality of earnings analysis and valuation, preparing marketing materials (Confidential Information Memorandum, target list of buyers, teaser package, NDA, etc.), and ensuring internal alignment.

Investment-bank-led process(6 to 9 months)

• Marketing and buyer outreach (2 to 3 months): Your investment banking team reaches out to strategic and financial buyers, manages NDA distribution, and circulates the Confidential Information Memorandum (CIM) and other confidential materials.
• Management meetings and offers(1 to 2 months): Management meetings are held with qualified buyers, and submission of offers is solicited (Indications of Interest and Letters of Intent).
• Due diligence and closing (3 to 4 months):Formal diligence, financial, operational, and legal review, negotiation, and final execution. This is where good preparation earns its keep.

Rushing often leads to lower valuations or broken transactions. A deliberate pace allows for stronger offers, cleaner processes, and better outcomes.

Transaction fees:

You should expect to pay for professional guidance and advice. You’re investing, not spending. Typical fee structures include:

• Investment banker/M&A advisor:Usually a monthly retainer (range of $5,000 to $10,000 per month plus a success fee at closing. Success fees are generally ~2+% to ~5+% of the transaction value in the lower middle market, with percentages declining as transaction size increases. (~5% for a $10 million transaction, ~2+% for a $100 million transaction).
• M&A attorney:$50,000 to $250,000 depending on complexity. Typically, the larger the transaction, the more complex it becomes. An experienced M&A lawyer is worth every dollar in negotiations and post-closing protection for the seller.
• Sell-side Quality of Earnings (QoE) report:$50,000 to $100,000+. This process, along with the existence of the final QoE report, gives buyers confidence in the financial figures and enables you, the seller, to proactively identify potential accounting issues, providing you with time to address them. Suppose you invest $75,000 in a Quality of Earnings report and it identifies at least $75,000 (which is often the case) in positive EBITDA adjustments, at a 6x multiple of Adjusted EBITDA. In that case, you’ve increased the company's valuation by $450,000 for an upfront investment of $75,000.
• Wealth manager and tax advisor:Fees vary, but these advisors help structure transaction tax liabilities and after-tax proceeds, ensuring you have a wealth management plan post-closing.

Total:Expect transaction costs in the range of 4% to 8% of enterprise value. This investment is worth it for the upside it helps unlock.

Why hiring an investment banker pays off

A study summarized in the Harvard Law School Forum (Study Link:https://corpgov.law.harvard.edu/2014/05/13/does-hiring-ma-advisers-matter-for-private-sellers/) shows private sellers often get significantly higher valuations when they engage a team of M&A advisors, especially top-tier firms. Here's why:

• Specialized expertise and access:Advisors bring dealmaking know-how, buyer networks, and the ability to orchestrate a competitive process. These things most private sellers lack.
• Narrowed valuation gaps:Private companies are inherently less transparent and risky than public ones. A reputable M&A advisor helps narrow that information asymmetry, reducing the discount buyers typically apply to private assets.
• Stronger bargaining power:Advisors generate multiple offers, strengthening your position and pushing up the purchase price.
• Valuation premiums of around 25%:The study shows that sellers who hire investment bankers typically see valuation premiums averaging 25%, according to multiple studies. If you can personally secure one offer for your business at a $50 million valuation, hiring an investment banker significantly improves your chances of getting multiple offers that might value the company at $62.5 million, a 25% increase over the $50 million offer. The difference is $12.5 million, and paying a ~4% cumulative advisory fee ($2.5 million) could generate an extra $12.5 million. Another interesting point is that private equity firms hire investment bankers when selling their portfolio companies, even though many private equity investors are former investment bankers themselves and could manage the process independently. However, they choose to hire reputable investment banking firms for reasons mentioned above.

The study’s findings imply that private sellers who retain M&A advisors receive 25% transaction valuation premiums, especially when working with top-tier teams. Interestingly, it found no evidence that top-tier advisors charge more than lesser-known firms, yet they tend to deliver better results.

Selling your business is one of the most important financial transactions you’ll ever execute. Yes, it takes roughly a year on average, and yes, it comes with costs. By keeping growth going, preparing your operations, and investing in the right advisors, you position yourself for a strong sale that maximizes your post-tax proceeds and secures your legacy. Hiring a sophisticated and educated team of professional M&A advisors is a decision that pays for itself through higher valuation, better terms, and a smoother path to closing.