How to buy a business in the UK

Buying an established business means buying revenue, customers, staff and a track record on day one. It also means buying somebody else's decisions, some of which you will not discover for a year.

This is how the process works, and where first-time buyers usually lose time.

Stage one: work out what you are actually looking for

Almost every first-time buyer starts by browsing listings. It is the wrong order, and it costs months.

Three questions decide everything that follows.

What can you fund? Not what you would like to spend. What a lender will advance against what you can contribute, including the working capital you will need after completion. Get an indicative view from a commercial finance broker before you look at a single business. It will narrow the field faster than any other decision.

What can you run? Be honest. A business needing hands-on technical knowledge you do not have requires you to retain somebody who does, and that person then has considerable leverage. A business requiring a licence or registration you cannot obtain is not available to you at all.

What are you buying it for? Income to replace a salary, an asset to grow and sell again, or something to add to an existing business. These lead to genuinely different purchases. A buyer wanting income should weight stability and owner-independence. A buyer intending to grow and exit should weight the ceiling.

Stage two: finding businesses

There are five routes and most buyers use one when they should use several.

Marketplaces and portals. The widest coverage of businesses actively for sale, searchable by sector, location and price. The obvious starting point and where most first-time buyers begin. Our search is free to browse with no registration.

Business transfer agents and brokers. Many businesses are marketed only through the agent handling them. Registering your criteria with several agents in your sector and region gets you on the list before a business reaches a portal, and sometimes before it is marketed at all.

Accountants and solicitors. Professional advisers often know an owner is thinking about selling months before anybody is instructed. It costs nothing to tell a few in your area what you are looking for.

Direct approach. Identify businesses you would want and write to the owner. The response rate is low and the quality of conversation is high, because there is no competitive process. This works best where you have genuine sector credibility.

Your own network. The single most common route to a small business sale. Suppliers, customers, competitors and employees buy businesses far more often than strangers do.

Do the public research before you enquire

Before contacting anybody about a specific business, spend twenty minutes on Companies House. Filed accounts, directors, persons with significant control, charges registered against the company, and the filing history are all free and public.

It will tell you whether accounts have been filed late or repeatedly amended, whether there is a debenture over the assets, whether directors have come and gone, and whether the company has other companies attached to it. None of that is conclusive. All of it shapes the questions you ask.

Stage three: getting past the confidentiality gate

Most listings are anonymised. To see the name and the detail you sign a non-disclosure agreement, which is normal and which you should read rather than click through.

What a seller is assessing at this point is whether you are a real buyer. You can make that easy:

• Say who you are and what you have done.
• Say what you are looking for and why this one fits.
• Say how you intend to fund it, at least in outline.
• Ask a specific question that shows you read the teaser.

Sellers receive enquiries that say "please send me the details" with no name attached. Being the buyer who does not send that puts you ahead of most of the field before anybody has discussed price.

Stage four: the first meeting and the questions that matter

You will get one early meeting, often off site and out of hours. The most useful questions are rarely financial.

• Why are you selling? Listen to the whole answer. Retirement, ill health and relocation are common and verifiable. A vague answer is worth pursuing.
• What would you fix if you were staying for three more years? The most useful question in the process. Most owners answer it honestly, because it is flattering, and the answer is a list of the problems.
• What happens to the business when you are not here for a fortnight?
• Who are your five largest customers, as a percentage of revenue, and how long has each been with you?
• Which of your staff would be hardest to replace?
• What has the lease got to run, and have you spoken to the landlord about a sale?
• Who else does what you do locally, and why do customers choose you?

Stage five: making an offer

An offer for a private business is a structure, not a number. The elements:

| Element | Effect | | --- | --- | | Cash on completion | Certain for the seller, hardest for you to fund | | Deferred consideration | Paid on a fixed later date, reduces your day one cash | | Earn out | Paid only if the business performs after completion | | Vendor loan | The seller lends part of the price back to you | | Retention | Held against warranty claims for a period |

Structure is how a deal gets done at a price both sides accept. A seller who wants £800,000 and a buyer who can fund £600,000 may meet at £780,000 with £180,000 deferred, and both do better than no deal.

An earn out also aligns interests: if you are uncertain about revenue that depends on the owner's relationships, tie part of the price to that revenue surviving. Sellers who believe their own numbers will usually accept it.

Once the shape is agreed it goes into heads of terms, which will grant you a period of exclusivity to do your due diligence.

Stage six: due diligence

Your chance to verify that the business is what it was described as. Budget four to twelve weeks and money for professional help: an accountant for the financial work and a solicitor for the legal.

Do not skip either to save fees. The cost of the advice is small relative to the price of the business and much smaller than the cost of finding out afterwards.

Our due diligence checklist covers the full scope. The areas that most often produce a genuine problem in small businesses are: the lease, customer concentration, the reliability of the management accounts, undisclosed liabilities in a share purchase, and employees with long service or live grievances.

Completion, and the first ninety days

Your solicitor will negotiate a share purchase agreement or an asset purchase agreement, with warranties from the seller and a disclosure letter qualifying them.

Then you own it, and the part nobody prepares for begins.

Agree the handover in writing before completion: how many days, over how long, at what cost. Meet the staff early, and say what is not changing before you say what is. Speak to the largest customers in the first fortnight, in person where you can. Resist changing anything material for the first three months unless it is urgent, because you do not yet know why it is the way it is.

The transfer of employees under TUPE means the team comes with their existing terms and continuity of service intact. That is a constraint and also an asset: the knowledge of how the business actually works is in those people, and most of it was never written down.

The market you are buying into

There were 5.7 million private sector businesses in the UK at the start of 2025, and 5.64 million of them had fewer than 50 employees. Businesses of that size are bought by individuals, by competitors, by suppliers and by small trade consolidators, not by funds.

That has a practical consequence. You are not competing with institutional capital for most of what you will look at. You are competing with two or three other individuals, and frequently with nobody at all, because the hardest part of this market is not price. It is finding the business in the first place.