Thinking About Selling Your Business? A UK Owner's Guide to Getting Started

If you've been quietly wondering whether it's time to start selling your business, you're in very good company. 41% of UK SME decision-makers say they're more likely to consider selling or exiting than a year ago. That's nearly half of all business owners asking themselves the same question you are.

In 2024, roughly 11% of UK SME owners were actively considering an exit. By 2025, that figure had risen to 14%. That represents thousands of businesses, from sole traders to established companies turning over millions.

Why now? The reasons are as varied as the owners themselves. Some have spent decades building something and feel ready for a new chapter. Others are watching economic and regulatory shifts and want to act while conditions are favourable. Some are simply tired. Running a business through Brexit, a pandemic, an energy crisis, and persistent inflation takes a toll that balance sheets don't capture.

Then there's the generational factor. A significant wave of baby-boomer business owners are approaching retirement age. Many built their companies in the 1980s and 1990s, and succession planning — or the lack of it — is forcing the question. Not every business has a son or daughter waiting in the wings.

Thinking about selling isn't the same as deciding to sell. It's the start of a process. Owners who start that process early, who give themselves time to prepare and understand their options, consistently do better than those who rush to market.

This guide covers what that preparation looks like in practice: the decisions, the steps, and the order to tackle them, whether you're planning to sell next year or you're still five years out.

Timing a business sale isn't like timing the stock market. You'll never pick the perfect moment, and waiting for one is a recipe for paralysis. But there are questions worth sitting with before you commit.

Are you ready personally?

Are you running toward something or away from something? Owners who sell because they're excited about what comes next — retirement, a new venture, travel, time with family — tend to handle the process better than those selling because they're burnt out. Both are valid reasons. But if you're exhausted, that fatigue can leak into negotiations and lead to accepting a price below what the business is worth. If burnout is the driver, consider whether a six-month break or a management restructure might restore your energy before going to market.

Is the business performing well? The best time to sell is when things are going right, not when they're going wrong. Buyers pay premiums for businesses with growing revenues, stable margins, and a clear trajectory. Selling during a downturn is possible, but you'll be negotiating from a weaker position and the valuation will reflect it.

Are there external factors creating urgency? Tax changes, regulatory shifts, and market consolidation can all create windows of opportunity. Right now, for UK business owners, the most significant of these is a looming change to Business Asset Disposal Relief — and it's worth understanding in detail.

Can you afford to sell? This sounds strange, but it matters. Have you worked out what the business is likely worth? Have you modelled the tax implications? Do you know what your post-sale life costs? An owner who needs £2 million to retire comfortably but whose business is worth £1.2 million has a problem that selling won't solve.

Are you emotionally ready? For many founders, the business is their identity. Selling it can feel like losing a part of yourself. That's not a reason to hold on forever — but it is something to process before you enter a transaction where clear-headed decision-making is essential.

None of these questions have right or wrong answers. They're calibration tools. They help you distinguish between "I should sell" and "I should prepare to sell" — two very different positions that lead to very different timelines.

If there's a single external factor pushing UK business owners toward a decision right now, it's the change to Business Asset Disposal Relief (BADR, formerly Entrepreneurs' Relief).

Here's the situation. BADR allows qualifying business owners to pay a reduced rate of Capital Gains Tax when they sell. The lifetime limit is £1 million in qualifying gains. Until April 2026, the BADR rate sits at 14%. After April 2026, it rises to 18%.

That four-percentage-point difference doesn't sound dramatic until you put actual numbers to it.

On a £1 million qualifying gain:

• At 14% (before April 2026): you'd pay £140,000 in tax
• At 18% (after April 2026): you'd pay £180,000 in tax

That's a £40,000 difference. On a single million. For owners selling businesses worth several million — where qualifying gains might approach the £1 million BADR cap — the savings from completing before April 2026 are material.

And here's the catch: "completing before April 2026" doesn't mean "starting to think about it in February 2026." A business sale isn't a house sale. You can't list it on Monday and exchange contracts on Friday. The process involves preparation, marketing, due diligence, legal work, and negotiation. Even a straightforward deal takes months.

Owners who want to benefit from the current 14% rate need to be well advanced in the process already. If you're reading this in early 2026 and haven't started, you're likely looking at the 18% rate — which is still considerably more favourable than the standard CGT rate of 24% on higher-rate gains.

But BADR shouldn't be the sole reason you sell. A business sold at the wrong time, to the wrong buyer, at a depressed price, will cost you far more than 4% in tax savings. The tax clock is a factor to weigh, not a reason to panic.

Speak to a tax adviser who specialises in business disposals. BADR qualification rules are specific — you need to have held at least 5% of the shares and voting rights for two years, among other conditions — and getting the structure wrong can disqualify you entirely.

Every owner has a number in their head. It might be based on what a competitor sold for, what a friend down the road got, or simply what they feel the years of effort deserve. That number is almost always wrong — sometimes too high, sometimes too low, but rarely aligned with what a buyer will actually pay.

For most UK SME transactions, the starting point is a multiple of adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation). EBITDA measures the operating cash flow your business generates, and the multiple reflects how much a buyer is willing to pay for each pound of it.

What multiples look like in the UK market

In the current UK market, SME deals typically trade at 3.5x to 5x adjusted EBITDA. Exceptional businesses — those with recurring revenue, strong growth, low owner dependence, and diversified customer bases — can reach 6x or higher. Weaker businesses, or those in distressed sectors, may struggle to achieve 3x.

Business type	Typical EBITDA multiple
SaaS / software	8–12x
Healthcare / technology services	6–9x
Professional services (diversified)	4–6x
Trade / manufacturing	3–5x
Retail / hospitality	3–4x

Put some numbers to it. If your business generates £400,000 in adjusted EBITDA and a buyer applies a 4.5x multiple, the enterprise value is £1,800,000. But enterprise value isn't what lands in your bank account. You'll need to subtract debt, add surplus cash, and account for working capital adjustments. The resulting equity value — after transaction costs, taxes, and adviser fees — is what you actually take home.

What pushes your multiple up or down

A few things that push multiples up:

• Recurring or contracted revenue. A business with 80% recurring revenue is worth significantly more than one relying on new sales every month.
• Low owner dependence. If the business runs without you, it's worth more. If you are the business, buyers see risk.
• Customer diversification. We'll come back to this, but single-client dependency is one of the fastest ways to kill a valuation.
• Growth trajectory. Consistent revenue growth of 10-15% annually commands a premium over flat or declining performance.
• Clean financials. Audited or professionally prepared accounts with clear EBITDA adjustments signal a well-run operation.

And things that push multiples down:

• Heavy owner involvement in day-to-day operations
• Customer concentration — especially where one client accounts for more than 30% of revenue
• Declining revenues or margins
• Pending legal issues or regulatory risks
• Significant deferred maintenance or capital expenditure needs

Getting a formal valuation before going to market isn't strictly necessary, but it's extremely useful. It gives you a realistic range to work with, highlights the areas where preparation can add value, and prevents the emotional shock of hearing a buyer's opening offer when it's lower than the number in your head.

Selling a business isn't just about finding a buyer. It's about having a business that's ready to be bought. The strongest exits are built on four foundations: financial management, operational strength, legal compliance, and personal readiness.

Financial management

Buyers will scrutinise your numbers in extraordinary detail. Two or three years of clean, professionally prepared accounts are the minimum. That means separating personal expenses from business costs, documenting every EBITDA adjustment with supporting evidence, and being able to explain revenue and margin trends month by month.

If you've been running personal expenses through the business — and most owner-managers do — now is the time to start unwinding that. Not because it's wrong (these are legitimate add-backs in a sale), but because a set of accounts with minimal adjustments is more credible than one requiring twenty add-backs to reach normalised earnings.

Debtors, creditors, stock levels, capital expenditure — all of these affect working capital, and working capital adjustments are one of the most common sources of post-completion disputes. Get your house in order now.

Operational strength

Can the business function without you? If the honest answer is no, that's the single biggest thing to fix before going to market. Buyers don't want to acquire a job. They want to acquire a business.

This means documented processes. A management team that can make decisions in your absence. Systems that don't depend on your personal relationships or institutional memory. If you've been the person who opens up, locks the doors, approves every purchase order, and calls every major client on their birthday — you need to start delegating.

Customer concentration deserves special attention. If a single client accounts for more than 30% of your revenue, that's a red flag for most buyers. If it's above 40%, the majority of buyers will walk away entirely. They see it as a business that's one phone call from catastrophe. Diversifying your customer base takes time, which is another reason to start preparing early.

Legal compliance

Due diligence will uncover everything. Employment contracts, IP ownership, property leases, supplier agreements, regulatory licences, data protection compliance, health and safety records — all of it gets reviewed. Gaps or issues don't necessarily kill deals, but they do create delays, reduce confidence, and often lead to price reductions or indemnity claims.

Conduct your own mini due diligence. Go through the business as if you were the buyer. What would worry you? What's missing? What's expired? Fix it now, not when a buyer's solicitor raises it as a condition of completion.

Personal readiness

This is the foundation most owners neglect. What will you do after the sale? Not in the abstract — specifically. Where will you find purpose, structure, and social connection? Many former owners experience a genuine identity crisis after selling. The ones who handle it best are those who've thought about it in advance and have a plan, even a loose one.

Consider whether you're willing to stay on during a handover period. Most buyers of SMEs expect the owner to remain for 3-12 months after completion, sometimes longer. If the idea of working for someone else in the business you built fills you with dread, that's worth factoring into your expectations.

"Selling your business" sounds like a single thing, but there are several distinct paths, and the right one depends on your goals, your business, and your personal circumstances.

Trade sale

Selling to another company in your sector or an adjacent one. Trade buyers often pay the highest prices because they can extract synergies — cost savings, cross-selling opportunities, access to your customer base. The downside? They may restructure or absorb your business entirely. If preserving the company's culture or your employees' jobs matters to you, a trade sale can feel uncomfortable.

Management buyout (MBO)

Selling to your existing management team. This is often the smoothest transition — the buyers already know the business, the staff, and the clients. But management teams rarely have the cash to fund the purchase outright, which means involving private equity, bank lending, or deferred consideration (the seller effectively financing part of the deal). MBOs can take longer to structure and may not achieve the highest headline price.

Private equity

PE firms acquire businesses as investment vehicles. They'll typically want you to retain a minority stake and stay involved for a few years, with a second exit (a "secondary buyout") down the line. This can be lucrative — you get cash today and a second bite at the cherry later — but it means giving up control and operating under financial targets and reporting requirements that may feel very different from running your own show.

Individual buyer

A private individual looking to acquire and run a business. Common in the sub-£2 million range. Individual buyers often bring passion and commitment, but may lack experience. Due diligence may take longer, and financing can be more complex. You can browse active listings on NewOwner's marketplace to see how other businesses in your sector are positioning themselves.

Employee Ownership Trust (EOT)

Selling to an EOT has gained popularity since the tax rules were introduced in 2014. Gains on qualifying EOT sales are exempt from Capital Gains Tax entirely — a significant benefit. But the trust needs to be able to fund the purchase, usually from the company's future profits, which means the purchase price may be paid over several years. EOTs work best for profitable, stable businesses with strong management teams.

Each route involves trade-offs between price, speed, certainty, and what happens to the business after you leave. Most owners benefit from exploring two or three options before committing.

Selling a business is not a DIY project. The owners who try to handle everything themselves almost always leave money on the table, make avoidable mistakes, or both. You need a team — and assembling the right one is one of the most important things you'll do.

Corporate finance adviser or business broker

This is the person (or firm) who runs the sale process. They help you prepare the business for market, produce the information memorandum, identify and approach potential buyers, manage the data room, and guide negotiations. For businesses valued below £1 million, a business broker is the usual route. Above that, a corporate finance adviser is more typical. Fees vary: brokers often charge 3-5% of the deal value plus a retainer; corporate finance advisers may charge a higher retainer with a lower success fee.

Choose someone with experience in your sector and at your deal size. Ask for references. Check their track record. A generalist who mostly handles property transactions isn't the right fit for selling a software company.

Solicitor

You need a solicitor experienced in M&A, not your usual commercial or property lawyer. They'll handle the sale and purchase agreement, disclosure letters, warranties, indemnities, and completion mechanics. A good M&A solicitor will also spot risks early and help structure the deal to protect your interests. Expect legal fees of £15,000 to £50,000 for a typical SME sale, depending on complexity.

Accountant and tax adviser

Your existing accountant can prepare the financial information buyers need, but you may also want a specialist tax adviser to structure the sale in the most tax-efficient way. The difference between getting BADR right and getting it wrong can be tens of thousands of pounds. Don't assume your regular accountant is up to date on disposal tax planning — ask directly.

Wealth manager or financial planner

Often overlooked, but worth the conversation. Selling a business means receiving a lump sum that needs to last potentially decades. How will you invest the proceeds? What income do you need? What are the inheritance tax implications? Having this advice in place before completion means you can negotiate from a position of clarity — you know exactly what number you need to walk away with.

A word on fees. It's tempting to economise on advisers, but the wrong team — or no team — will cost you far more than their fees. A corporate finance adviser who achieves an extra 0.5x on your EBITDA multiple more than pays for themselves. A solicitor who catches a poorly drafted warranty clause saves you from a post-completion claim. View these costs as investments in the outcome, not expenses to minimise.

You can explore NewOwner's plans to understand the tools and exposure available when you're ready to bring your business to market.

One of the biggest surprises for first-time sellers is how long the process takes. The exit process typically runs 12 to 36 months from the moment you decide to sell to the moment completion funds hit your account. Some deals move faster. Many take longer.

Here's a realistic breakdown:

Months 1-6: Preparation. Getting the business ready. Cleaning up accounts, documenting processes, addressing legal gaps, reducing owner dependence, diversifying the customer base if possible. This is also when you assemble your advisory team and get a realistic valuation. Many owners spend 12-18 months in this phase, and the ones who do tend to achieve better prices and smoother transactions.

Months 6-9: Going to market. Your adviser prepares the information memorandum and begins approaching potential buyers — either through targeted outreach or a controlled marketing process. You'll sign NDAs, field initial questions, and manage the tension between running the business and managing the sale process. This is where having a management team you trust becomes essential.

Months 9-12: Offers and negotiation. If the marketing generates interest, you'll receive indicative offers (sometimes called "heads of terms" or "letters of intent"). These are non-binding — they outline the headline price, structure, and key conditions. Negotiating these terms is a skill, and it's where your corporate finance adviser earns their fee.

Months 12-18: Due diligence and legals. Once you've accepted heads of terms, the buyer's team descends. They'll examine financial records, contracts, employee matters, IT systems, regulatory compliance, intellectual property, and anything else that affects value or risk. This is the most stressful phase. It's intrusive, time-consuming, and often throws up issues that require renegotiation. Meanwhile, you're still running the business.

Month 18+: Completion. The sale and purchase agreement is signed. Funds transfer. Champagne, perhaps. Then the handover period begins, which may last anywhere from three months to a year or more.

Some factors that speed things up: clean accounts, few legal issues, a well-prepared data room, a motivated buyer with funding in place, and an experienced advisory team on both sides.

Some factors that slow things down: messy financials, unresolved legal matters, buyer financing complications, disagreements on price or terms, and external shocks like economic downturns or regulatory changes.

The single most common mistake? Underestimating the time required and starting too late. If you think you want to sell in two years, start preparing now.

The thinking stage is valuable in itself, because it forces you to look at your business through a buyer's eyes. That perspective, whether or not you ever sell, tends to make you a better owner.

But if you are ready to move from thinking to doing, here are five things you can do this week:

1. Write down your 'why.' Not for anyone else. For yourself. Why are you considering selling? What do you want the sale to achieve, financially, personally, professionally? This clarity will guide every decision that follows.

2. Run a rough valuation. Take your last full year's EBITDA, adjust for obvious owner-specific items, and multiply by 4. That gives you a ballpark enterprise value for a typical UK SME. It's crude, but it tells you whether the numbers are in the right postcode.

3. Identify your biggest vulnerability. Is it customer concentration? Owner dependence? Messy accounts? Pending legal issues? Whatever it is, that's where to focus your preparation efforts first.

4. Have an honest conversation with your accountant. Tell them you're thinking about selling. Ask about BADR eligibility, tax structuring, and what the accounts need to look like. It costs nothing and can save you thousands.

5. Start looking at the market. See what businesses similar to yours are listed for, how they're described, and what they emphasise. NewOwner's sell-business page is a good place to start understanding your options and the process.

Selling a business you've built is a significant financial and emotional event. The owners who give it proper time, who treat the exit as a process rather than an event, consistently do better than those who rush. You don't have to decide today. But starting to prepare? That you can do right now. For the full process walkthrough, read our step-by-step guide to selling a business in the UK.

For independent background on the sale process, the British Business Bank's guide to selling your business offers a solid overview of the key steps and considerations.