How Long Does Escrow Take

Selling your California business and its cherished commercial real estate marks a thrilling chapter in your entrepreneurial journey. But before you envision yourself basking on a sun-kissed beach, remember the final hurdle: escrow. Think of it as the final tunnel before emerging onto the highway of a successful M&A exit.

So, how long is this tunnel for lower middle market deals involving both a business and property in the Golden State? Buckle up, because the answer isn't as straightforward as the Golden Gate Bridge's swift span. Escrow timelines can range from 3 to 6 months, and sometimes even longer, depending on a winding road of factors:

Complexity Crossroads: Your business structure, the property's quirks, and the number of parties involved all play a role. A streamlined LLC with a storefront in a well-zoned area will likely zip through escrow faster than a multi-partnered corporation with sprawling property and complex environmental issues.

Financing Frenzy: If the buyer needs financing, their lender's due diligence adds another layer of paperwork and inspections, potentially extending the timeline. Remember, a mortgage isn't just a romantic stroll in the park; it's a thorough vetting process.

Paperwork Pirates: Missing documents, title issues, and forgotten permits can be like rogue waves, tossing your timeline about. Be organized and thorough upfront to avoid unnecessary delays. Treat paperwork like a treasure map, meticulously gathering everything before setting sail.

Government Gatekeepers: California agencies like the EDD and Franchise Tax Board have their own review processes, which can be time-consuming, especially for deals involving commercial real estate. Think of them as meticulous gatekeepers ensuring everything is shipshape before allowing you to raise the "Sold!" flag.

Steering Your Escrow Ship: Don't just sit back and hope for a quick crossing. Here's how to navigate the escrow currents:

• Hire a Savvy Navigator: An experienced M&A broker familiar with California's intricacies can smooth the ride and anticipate potential obstacles. Think of them as your trusty captain, guiding you through the choppy waters with expert knowledge.
• Chart Your Course: Communicate openly with your buyer and other involved parties, setting realistic expectations and keeping everyone on the same page. Open communication is like a well-trimmed sail, propelling you forward without unnecessary snags.
• Be Prepared for Detours: Have your ducks in a row – gather documents early, address potential issues proactively, and be flexible in negotiations. Remember, flexibility is your rudder, allowing you to maneuver around unexpected obstacles.

While the Californian escrow tunnel might seem long, a smooth exit awaits on the other side. With knowledge, preparation, and a skilled guide, you can navigate the complexities and emerge victorious – keys in hand, and dreams realized. So, take a deep breath, chart your course with confidence, and prepare to enjoy the exhilarating journey towards your M&A finish line!

Remember, understanding the "why" behind escrow timelines empowers you to take control. By anticipating potential delays and navigating the process strategically, you can transform the escrow tunnel into a smooth passage toward a successful California M&A exit.

Sell-Side M&A California Dreamin': Unlock Your Exit Velocity with Your Commercial Real Estate Jewel

California: the land of golden sunsets and sizzling M&A deals. But when it comes to selling your business with its accompanying commercial real estate, the Golden State throws in a twisty canyon road of complexities. Fear not, intrepid entrepreneur! Buckle up, grab this guide, and prepare to rocket-boost your California M&A exit to warp speed, commercial property and all.

First Gear: Know Your California Crossroads:

• Lease or Sell? Is your brick-and-mortar an inseparable partner or a detachable caboose? Weigh the pros of a joint sale against the flexibility of leasing. A chain of Gas stations and car washes scream "package deal," while a charming bookstore might thrive with a lease arrangement.
  
  
• Due Diligence Detour: Don't let hidden bumps in the road derail your deal. Scrutinize environmental issues, zoning quirks, and building blues (think leaky roofs and outdated wiring) before "Sold!" signs dance in your head.
  
  

Second Gear: Navigate the Paperwork Maze:

• Rent Roulette: Did you play fair with the rent game? Market-rate or friendly handshake? Remember, a rent hike for the buyer can drain their engine, impacting your sale price. Transparency is key to avoiding a flat tire.
  
  
• Tax, Insurance, and Maintenance Monster: Haven't been paying property taxes or ignoring building insurance? These gremlins can stall your M&A deal faster than a CHP checkpoint. Be upfront and address these lurking costs for a smooth ride.
  
  

Third Gear: Shift into Negotiation Overdrive:

• Lease Labyrinth: Can you handle a short-term lease and an empty storefront? What if the buyer's SBA loan ties them to a marathon lease? Understand your risk tolerance before negotiating terms.
  
  
• Local Use Laws: Every town has its quirks. Zoning regulations can be trickier than a Hollywood script. Do your research to avoid detours caused by incompatible uses for your property.
  
  

Fourth Gear: Arrive at "Closed!" Triumphantly:

• Informed Decisions: Weigh the pros and cons of a joint sale or lease with a clear head. This roadmap will guide you to the exit lane marked "Success."

Bonus California M&A Fuel:

• Did you know the most expensive California M&A deal involving commercial real estate was Oracle buying Sun Microsystems for a cool $7.4 billion? Talk about a Silicon Valley gold rush!
  
  
• The first recorded M&A in history dates back to 3000 BC in Mesopotamia, where a pottery maker merged with a brick manufacturer. So, M&A deals are far from new, even in California!
  
  

Remember, a California M&A with commercial real estate is an exciting journey, not a bumpy backroad. With careful planning, informed decisions, and this guide as your compass, you'll navigate the complexities and unlock your exit velocity, leaving you basking in the golden glow of a successful deal. Now, hit the gas and make your California M&A dreams a reality!

Why Chart Your California Exit with Andrew Rogerson at the Helm?

Selling your California business and its accompanying commercial real estate is a pivotal moment, ripe with excitement and complexity. While the potential rewards are vast, navigating the winding California M&A landscape can feel like sailing uncharted waters – especially if you're a retired business owner unfamiliar with the intricacies of selling a lower middle market business with valuable property.

This is where Andrew Rogerson, your seasoned M&A advisor, steps in like a skilled captain, ready to guide you through the currents and toward a smooth, profitable exit. With over 20 years of experience navigating California M&A deals, particularly in the lower middle market, Andrew's expertise is your anchor in these choppy waters.

Why Choose Andrew to Steer Your Exit Voyage?

• Californian Know-How: Andrew intimately understands the unique legal, financial, and regulatory nuances of California M&A, especially when commercial real estate is involved. He's your local expert, adept at navigating the labyrinthine complexities of escrow, permits, and title issues.
• Lower Middle Market Mastery: Andrew specializes in guiding the exits of lower middle market businesses like yours. He understands the specific challenges and opportunities relevant to your size and sector, ensuring you receive personalized attention and tailored strategies.
• Negotiation Ninja: From purchase price allocation to lease agreements, Andrew is a master negotiator, securing the best possible terms for your business and property while protecting your interests every step of the way.
• Stress-Free Sailing: Let Andrew handle the paperwork blizzard, due diligence dives, and communication maelstrom. He'll take the wheel, leaving you free to focus on the joys of retirement, knowing your financial future is in capable hands.
• Proven Track Record of Success: Andrew's impressive portfolio of successful lower middle market M&A deals in California speaks for itself. He's helped countless retired business owners like you achieve a smooth, lucrative exit, maximizing their profits and minimizing stress.

Investing in Andrew's guidance is an investment in your peace of mind and financial security. His expertise, experience, and dedication ensure your California M&A journey is not just successful, but also stress-free. So, ditch the DIY map and let Andrew Rogerson, your trusted M&A advisor, chart the course to a smooth, sun-kissed Californian exit.

Contact Andrew today for a free consultation and chart your course towards a successful M&A journey. Don't let the complexities of selling your business and property become a storm cloud on your retirement horizon. Set sail with Andrew at the helm, and navigate the Californian M&A waters with confidence, clarity, and ultimately, a satisfying windfall at your destination.

Remember, with Andrew Rogerson guiding the way, your Californian M&A exit will be anything but a rough ride. So, raise the sails, unfurl the map, and let Andrew's experience lead you to a smooth, successful, and richly rewarding Californian exit.

Final Takeaways With Business Valuation

While there are many methods to determine the value of your lower middle market business in California, the EBITDA business valuation approach is recommendable. It focuses on a company’s operating performance, which gives a true picture of a business’s value.

Determining the value of your business will go a long way in helping you know what to ask for when selling your company. While it can be an overwhelming process, having a certified M&A advisor by your side can make things easier and help you get your service business’s worth.

Download a business valuation sample: Download PDF

If you are a retiring business owner looking to exit your lower middle market business in California, here are six tips to get you started:

1. Don't wait until the last minute to start planning your exit. The process of selling a lower-middle market business can take a long time, so it's important to start early.

2. Have a clear idea of what you want to get out of the sale. Know your goals and what you're willing to negotiate.

3. Know what's your company's worth. This is an essential step to take when planning to sell your service business company in California.

4. Choose the right type of buyer. Not all buyers are created equal, so do your research and find the right one for your business.

5. Be prepared for a lot of due diligence. M&A buy-side due diligence is when buyers will want to know everything about your business, so be ready to provide documentation and answer questions.

6. Be flexible with the terms and conditions of the deal. It's important to be open to negotiation to get the best possible deal for your business.

Rogerson Business Services, also known as, California's lower middle market business broker is a sell-side M&A advisory firm that has closed hundreds of lower middle-market deals in California. We are dedicated to helping our clients maximize value and achieve their desired outcomes. 

We have a deep understanding of the Californian market and an extensive network of buyers, which allows us to get the best possible price for our clients. We also provide comprehensive support throughout the entire process, from initial valuation to post-closing integration. 

Our hands-on approach and commitment to our client's success set us apart from other firms in the industry. If you consider selling your lower-middle market business, we would be honored to help you navigate the process and realize your goals.

If you have decided to value and then sell your lower middle market company or are still not ready, get started here, or call toll-free 1-844-414-9600 and leave a voice message with your question and get it answered within 24 hours. 

The deal team is spearheaded by Andrew Rogerson, Certified M&A Advisor, he will personally review and understand your pain point/s and prioritize your inquiry with Rogerson Business Services, RBS Advisors.

Go to the next article: Escrow M&A and unlock the escrow process in California.