Why Does it Take On Average 2 Years to Buy a Business?

December 08, 2023

by an intermediary from Gonzaga University in Tacoma, WA, USA

Why Does it Take On Average 2 Years to Buy a Business?

Is there any research on why?

Or why the vast majority of people that get education on business a business never do?

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Reply by a searcher
from Southwestern University in Houston, TX, USA

My experience with coaching folks looking to buy is that the 2 year average is due to the start-and-stop nature of most searches. People will search just enough to find a promising business and focus all of their attention on that business until it is a no or they buy (9-to-1 odds it is the former). At which point, they start looking for businesses again and have all of that startup runway again.

To the second question, there aren't a lot of signposts in searching. One can chase a deal for a long time even though it was a low probability from the start. But unless there's a process they're using for excluding as many businesses as possible, the whole thing is a lot of time and effort without finding "that one business". Money runs out and it's time to get back in the W2 world.

Reply by a searcher
from Stanford University in Salt Lake City, UT, USA

I also think your mentality changes over the course of the search. At first you might be very picky, thinking the ideal business is still out there, so you don't want to commit yourself to something. So you wait, or don't aggressively pursue things. Then, you realize you can't look forever, you're searching $$ starts to run out, and you have a newfound sense of urgency to get something done and perhaps are much less choosy than before.

Plus there is just the learning process. You haven't seen many deals to really recognize a "good" one vs a "bad" one. So there is also some prudence in searching for a bit before committing. This is where an advisor or coach could help. Use their experience to guide you, not yours.

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