How to sell a business in the UK

Most guides to selling a business describe the transaction. The transaction is the easy part. What decides whether you get a good price, a poor price, or no price at all is almost entirely settled in the months before anybody sees your accounts.

This is the whole process, in the order it actually happens.

Before anything: is the business sellable?

A business is sellable when a buyer can see themselves owning it without you. That sounds obvious and it is the single most common reason a sale falls over.

Ask the hard version of the question. If you were away for three months, what would break? If the answer is the customer relationships, the pricing decisions, the supplier negotiations and the quotes, then you are not selling a business, you are selling a job that happens to have your name on the door. A buyer will see that within an hour of the first meeting and will price it accordingly, if they proceed at all.

The fix takes time, which is why this comes first. Document the processes. Move relationships onto the business rather than onto you. Promote or hire someone who runs the day to day. Twelve months of that work will do more for your price than any amount of negotiation.

Stage one: get the numbers into a state you can defend

Expect this to take one to three months. Three things matter.

Clean, current accounts. Filed accounts are a matter of public record, so a buyer will already have them before they speak to you. Management accounts for the current year matter more, because the filed set may be eighteen months old by the time it is read. If your management accounts are unreliable, fix that first: a buyer who finds a discrepancy stops trusting everything else on the page.

Adjusted profit, worked out honestly. Owner-managed businesses run personal costs through the company and under-report the true earnings as a result. Adjusting for that is legitimate and expected. What is not legitimate is treating a genuine business cost as an add-back because it would make the multiple look better. Every add-back you cannot evidence will be removed by the buyer's accountant, and each one you tried costs you credibility on the ones that were real.

A clear picture of what is being sold. Are you selling the shares in the company or the trade and assets? Does the property go with it, or does the buyer take a lease from you? What happens to the cash in the business, the debtors, the stock? These are not details to settle later. They change the price, the tax and the buyer pool.

Stage two: form a price expectation you can live with

Not a valuation. An expectation.

Most small UK businesses sell on a multiple of adjusted profit, and the multiple depends on the sector, the size, the quality of the earnings and how much of the business walks out of the door with you. A leasehold hospitality business changes hands on a low multiple of adjusted profit. A services business with contracted recurring revenue and a management team commands considerably more. Our guide to how businesses are valued sets out the mechanics, and the valuation calculator will give you a starting range.

The number that matters is your walk-away number: the figure below which you would rather keep trading. Work it out now, in private, with your own finances in front of you. Owners who have not done this arrive at month eight of a sale, exhausted, facing a reduced offer, with no basis for the decision other than how tired they feel.

Stage three: go to market, confidentially

Most business sales are confidential, and for good reason. Staff who learn the business is for sale start looking. Customers who learn it start talking to competitors. Suppliers reconsider terms. None of that is recoverable if the sale then falls through.

Confidential marketing means the business is presented as an anonymised teaser: sector, region, approximate size, the shape of the opportunity, and nothing that identifies it. A buyer who wants more signs a non-disclosure agreement first. Only then does the name, the location and the detailed financial information get released.

This is worth doing properly rather than approximately. A teaser that says "established West London restaurant, 90 covers, 2019 refit, turnover £1.1m" identifies the business to anyone in that trade who cares to look.

1. Anonymised teaser goes live

   Sector, region, size band and the reason it is attractive. No name, no address, no photographs of a signed frontage.

2. Buyer registers interest

   You see who they are before they see who you are. That asymmetry is the point.

3. NDA signed

   A real undertaking, recorded, with a date and a version. Then the name and the detail are released.

4. Meeting and questions

   Usually after hours or off site. Most sellers do not have a buyer walk the floor until much later.

Stage four: offers and heads of terms

An offer for a private business is rarely a single number. It is a structure: how much on completion, how much deferred, how much conditional on performance after the sale, and what happens to the property, the cash and the debt.

Two identical headline prices can be worth very different amounts. Two million pounds in cash on completion is not the same as two million pounds with six hundred thousand deferred over three years and conditional on retaining the top two customers. Read the structure, not the total.

Once you have agreed the shape, it goes into heads of terms: a short document setting out the price, the structure, the timetable, the exclusivity period, and what each side will do next. Heads of terms are usually not binding on the price, and are usually binding on confidentiality and costs. Our clause by clause walkthrough covers what each section is doing and which parts are worth arguing about.

The important thing about heads of terms is that after they are signed, the negotiation has effectively happened. Everything from here is the buyer looking for reasons to pay less. Which brings us to the part that catches people out.

Stage five: due diligence

Due diligence is the buyer and their advisers checking that the business is what you said it was. It takes four to twelve weeks for a small business and it is the stage at which most deals die.

They will ask for: statutory and management accounts, tax filings, VAT returns, the lease, employment contracts and the payroll, customer and supplier contracts, any litigation, insurance, licences, and increasingly a full picture of data protection and IT. They will ask for the detail behind every add-back you claimed.

Two pieces of advice, both learned the hard way by other people.

Prepare the pack before you need it. A buyer who waits three weeks for a document concludes either that you are disorganised or that there is a problem with it. Neither helps. Our guide to the document pack is the list.

Disclose the problems yourself, early. Every business has something: a dispute, a concentration risk, a lease with an awkward break clause, a customer who is slow to pay. A buyer who finds it themselves in week six re-prices the deal and starts wondering what else you did not mention. A buyer who was told about it in week one treats it as a known factor. The same fact, disclosed differently, is worth a materially different amount.

Stage six: the legal close

Your solicitor drafts or negotiates a share purchase agreement or an asset purchase agreement. The substance of the negotiation is the warranties: statements you make about the business which, if untrue, give the buyer a claim against you.

You limit that exposure through the disclosure letter, which sets out the things that qualify each warranty. The disclosure letter is where the problems you disclosed in due diligence earn their keep: a disclosed fact cannot later be a warranty claim.

Expect four to eight weeks from instructing solicitors to completion, longer if there is property or a lender involved.

What the timetable actually looks like

| Stage | Typical duration | What decides it | | --- | --- | --- | | Preparation | 1 to 3 months | How good your records already are | | Marketing and finding a buyer | 2 to 6 months | Sector demand and how the business is presented | | Offer to signed heads of terms | 2 to 6 weeks | How well prepared both sides are | | Due diligence | 4 to 12 weeks | Whether the pack was ready on day one | | Legal to completion | 4 to 8 weeks | Property, lenders, and warranty negotiation |

Six to twelve months, in other words, and the first stage is the one most owners skip.

The context worth knowing

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 in that size band do not generally get sold through investment banks and are not generally bought by funds. They are bought by individuals leaving corporate careers, by competitors, by suppliers and customers, and by small trade consolidators.

That matters for how you sell. Your likely buyer is not running a screening algorithm across the market. They are a person, searching, who needs to find you and then needs to be able to believe what they find.

A short list of what actually goes wrong

• The owner is the business, and nobody noticed until a buyer said so.
• The add-backs did not survive the buyer's accountant, and the price moved with them.
• A problem surfaced in week six of due diligence that should have surfaced in week one.
• One customer is 40 per cent of revenue and nobody had a plan for the question.
• The lease had two years to run and the landlord had not been spoken to.
• The seller ran out of energy in month nine and accepted a number they had already decided was too low.

Every one of those is avoidable, and every one of them is avoided before you go to market rather than during the deal. That is the whole argument for treating preparation as the main event.