Thinking about selling your business? A UK owner's guide to getting started

If you've been quietly turning over the idea of selling, you're far from alone. 41% of UK SME decision-makers now say they're more likely to consider an exit than they were a year ago. That's almost half of all owners sitting with the same question you are.

In 2024, roughly 11% of UK SME owners were actively considering selling. By 2025, the figure had climbed to 14%. We're talking about thousands of businesses, from sole traders to companies turning over tens of millions.

Why now? The honest answer is that there isn't one reason. Some owners have spent twenty or thirty years building something and feel ready for whatever comes next. Others are reading the economic tea leaves and want to act while conditions hold. And some are just knackered. Running a business through Brexit, a pandemic, an energy crisis and stubborn inflation takes a toll that no balance sheet captures.

There's also the generational piece. A large wave of baby-boomer owners is hitting retirement age. Many of them built their companies in the 80s and 90s, and the succession question (or the lack of an answer to it) is now unavoidable. Not every business has a son or daughter waiting in the wings.

Thinking about selling and deciding to sell are two very different things. The first is the start of a process. From what I've seen on the buyer side of the table, owners who give themselves real time to prepare almost always come out better than the ones who rush to market because life forced their hand.

This guide is about what that preparation actually looks like, whether you're planning to sell next year or you're five years out.

Timing a business sale is not like timing the stock market. You'll never pick the perfect moment, and waiting for one is how you end up still trying to sell at 70. There are, however, a few questions worth sitting with before you commit.

Are you running toward something, or away from something? In my experience, owners who sell because they're genuinely excited about what's next (retirement that actually looks like retirement, a new venture, more time at home) handle the process much better than owners selling because they're burnt out. Both are legitimate reasons to sell. The trouble is that exhaustion leaks into negotiations. Tired sellers accept offers they shouldn't. If burnout is what's pushing you, ask yourself first whether a real six-month break or a proper management restructure might give you back the energy to make a clear-headed decision.

Is the business actually performing? The best time to sell is when things are going right, not when revenue has just dipped or you've lost a big client. Buyers will pay a premium for growing revenues, stable margins, and a story they can believe. Selling in a downturn is possible. But you'll be negotiating from a weaker position, and the valuation will say so.

Are there external factors pushing the timing? Tax changes, regulatory shifts, sector consolidation. For UK owners right now, the loudest external factor is the looming change to Business Asset Disposal Relief, which I'll come back to.

Can you afford to sell? It sounds like an odd question, but it matters more than people think. Have you worked out what the business is realistically worth? Have you modelled the tax? Do you know what your post-sale life actually costs? If you need £2 million to retire on the standard you want, and the business is worth £1.2 million, selling won't solve your problem. Better to know that now than to find out at the negotiating table.

Are you emotionally ready? For most founders, the business is wrapped up with their identity. I've sat across from sellers who said all the right things in meetings and then froze the moment we got to heads of terms, because the reality of letting go hit them. That's not a reason to hold on forever. It is a reason to do the emotional work before you enter a process where you need to think clearly.

None of these questions have right or wrong answers. They're calibration tools. They help you tell the difference between "I should sell" and "I should prepare to sell." Those are two very different positions, and they lead to very different timelines.

If there's one external factor pushing UK owners off the fence right now, it's the change to Business Asset Disposal Relief (BADR, which used to be called Entrepreneurs' Relief).

Here's the short version. BADR lets qualifying owners pay a reduced rate of Capital Gains Tax when they sell. The lifetime limit is £1 million in qualifying gains. Until April 2026, the rate is 14%. From April 2026, it goes to 18%.

Four percentage points doesn't sound dramatic. Then you put 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 £40,000 of difference on a single million. For owners selling businesses worth several million, where qualifying gains nudge up against the £1 million BADR cap, the saving from completing before April 2026 is real money.

The catch is in the word "completing." Completing before April 2026 doesn't mean starting to think about it in February 2026. A business sale is nothing like a house sale. You can't list it on Monday and exchange contracts on Friday. There's preparation, marketing, due diligence, legal work, negotiation. Even a clean deal takes months. A messy one can take well over a year.

If you want the current 14% rate, you need to already be well into the process. If you're reading this in early 2026 and you haven't started, you're realistically looking at the 18% rate. Which, by the way, is still meaningfully better than the standard CGT rate of 24% on higher-rate gains. So it's not the end of the world.

BADR also shouldn't be the only reason you sell. A business sold at the wrong time, to the wrong buyer, at a knocked-down price, will cost you far more than 4% in tax. The tax clock is one factor in the decision, not the decision itself.

Get in front of a tax adviser who actually specialises in business disposals. The BADR rules are fiddly. You need to have held at least 5% of the shares and voting rights for two years, plus a handful of other conditions. Get the structure wrong and you can disqualify yourself entirely.

Every owner has a number in their head. It's usually based on what a competitor sold for, what a mate down the road got, or what twenty years of effort feels like it should be worth. That number is almost always wrong. Sometimes too high, sometimes too low, but rarely close to what a buyer will actually pay.

For most UK SME deals, the starting point is a multiple of adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation). EBITDA is roughly the operating cash flow your business throws off. The multiple reflects how much a buyer will 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. The exceptional ones, with recurring revenue, real growth, low owner dependence and a diversified customer base, can hit 6x or higher. Weaker businesses, or anything in a sector buyers are nervous about, may struggle to get 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

Let's put 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. Enterprise value, however, is not what lands in your bank account. You subtract debt, add surplus cash, and there's a working capital adjustment in there too. The equity value, once transaction costs, tax and adviser fees are out, is what you actually take home. It's almost always less than owners expect.

What pushes your multiple up or down

Things that push multiples up:

• Recurring or contracted revenue. A business that wakes up on the 1st of the month with 80% of its revenue already locked in is worth a lot more than one starting from zero 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. More on this below, but single-client dependency is one of the fastest ways to wreck a valuation.
• Growth trajectory. Steady 10-15% annual growth gets a premium over flat or declining performance.
• Clean financials. Audited or properly prepared accounts with clear EBITDA adjustments tell a buyer you run a tight ship.

Things that push multiples down:

• You doing too much in the day-to-day
• Customer concentration, especially when one client is north of 30% of revenue
• Declining revenues or margins
• Pending legal issues or regulatory risk
• A pile of deferred maintenance or capex you've been putting off

Getting a formal valuation before going to market isn't strictly required. It's useful all the same. It gives you a realistic range, flags where preparation can lift the number, and saves you from the gut-punch of hearing an opening offer that's well below what you had in your head. For a deeper look at the methods buyers use, read our guide on how to value a business in the UK.

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

Financial management

Buyers will dig into your numbers in a way you've probably never had to deal with before. Two to three years of clean, professionally prepared accounts is the minimum. That means personal expenses separated from business costs, every EBITDA adjustment documented with supporting evidence, and you being able to explain revenue and margin trends month by month without having to dig through old emails.

If you've been running personal expenses through the business (and most owner-managers I know have, to some degree), now is the time to start unwinding that. Not because it's wrong, exactly. These are legitimate add-backs in a sale. But a set of accounts with three add-backs reads as far more credible than a set requiring twenty just to reach normalised earnings. Buyers get suspicious of long lists of adjustments.

Debtors, creditors, stock levels, capex. All of it feeds into working capital, and working capital adjustments are one of the biggest sources of post-completion arguments. Tidy it up before anyone else looks at it.

Operational strength

Can the business actually function without you? If the honest answer is no, fix that before anything else. Buyers don't want to acquire a job. They want to acquire a business.

In practice, that means documented processes. A management team that can make decisions when you're not in the room. Systems that don't live entirely in your head or your phone. 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 letting go now. Honestly, the hardest part is not the operational handover. It's accepting that someone else will do things differently and the business will survive it.

Customer concentration is worth its own paragraph. If one client is more than 30% of your revenue, that's a red flag for most buyers. Above 40%, most will walk away entirely. They see a business that's one phone call away from catastrophe. Diversifying takes time, which is another reason not to leave preparation until the last minute.

Legal compliance

Due diligence will find everything. Employment contracts, IP ownership, property leases, supplier agreements, regulatory licences, data protection, health and safety, the lot. Gaps don't always kill a deal, but they cause delays, knock buyer confidence, and often turn into price reductions or indemnity claims at the eleventh hour.

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

Personal readiness

This is the one most owners neglect. What will you actually do after the sale? Not in the abstract. Specifically. Where will you find purpose, structure, the people you used to see every day? A lot of former owners go through a real identity wobble after selling. The ones who handle it best are the ones who'd thought about it in advance and had at least a rough plan.

Think about whether you're willing to stay on during a handover. Most SME buyers expect the seller to remain for three to twelve months after completion, sometimes longer. If the idea of working for someone else in the business you built makes your stomach drop, factor that in before you start negotiating.

"Selling your business" sounds like one thing. It isn't. There are several quite different paths, and the right one depends on your goals, your business, and what you want to happen to it after you're gone.

Trade sale

Selling to another company in your sector, or one next door. Trade buyers often pay the highest prices because they can extract synergies, like cost savings, cross-selling, access to your customer base. The downside is that they may restructure the business or absorb it entirely. If keeping the culture intact or protecting your team matters to you, a trade sale can feel uncomfortable. I've watched a few sellers regret this one a year after completion.

Management buyout (MBO)

Selling to your existing management team. Often the smoothest transition because the buyers already know the business, the staff, and the clients. The catch is that management teams rarely have the cash sitting in the bank to fund the purchase outright. So you end up bringing in private equity, bank lending, or deferred consideration (you, effectively, financing part of the deal). MBOs can take longer to structure, and the headline price tends to be lower than a competitive trade sale.

Private equity

PE firms buy businesses as investment vehicles. They'll usually want you to keep a minority stake and stay involved for a few years, with a second exit (a "secondary buyout") at the end. It can be lucrative. Cash today, a second bite later. But you give up control, and you'll be operating under financial targets and reporting requirements that feel very different from running your own show.

Individual buyer

A private individual looking to acquire and run a business themselves. Common in the sub-£2 million range. Individual buyers often bring real passion and commitment, but sometimes lack experience. Due diligence can drag, and financing is sometimes more complicated than they led you to believe. You can browse active listings on NewOwner's marketplace to see how businesses in your sector are positioning themselves.

Employee Ownership Trust (EOT)

Selling to an EOT has become a lot more popular since the tax rules came in back in 2014. Gains on qualifying EOT sales are exempt from Capital Gains Tax entirely, which is a serious incentive. The catch is that the trust has to fund the purchase, usually from the company's future profits, so the purchase price often gets paid out over several years. EOTs work best for profitable, stable businesses with a strong management team and an owner who isn't in a hurry for the cash.

Each route is a trade-off between price, speed, certainty, and what happens to the business after you walk out. Most owners benefit from looking at two or three options before committing to one.

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. Assembling the right one is one of the most important things you'll do in the entire process.

Corporate finance adviser or business broker

This is the person (or firm) who runs the sale process. They help you prepare for market, produce the information memorandum, find and approach buyers, manage the data room, and steer 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 tend to want a bigger retainer with a lower success fee.

Pick someone with real experience in your sector and at your deal size. Ask for references. Look at their actual track record, not just the logos on their website. A generalist who mostly does property transactions is not the right fit for selling a software company.

Solicitor

You need a solicitor with real M&A experience, not the firm that does your commercial leases. They'll handle the sale and purchase agreement, disclosure letters, warranties, indemnities, and the completion mechanics. A good M&A solicitor also spots risks early and structures the deal to protect you. Expect legal fees of £15,000 to £50,000 for a typical SME sale, depending on how complicated things get.

Accountant and tax adviser

Your existing accountant can prepare the financial information buyers need. For the structuring, though, you'll likely want a specialist tax adviser who lives in this world. Getting BADR right versus getting it wrong is tens of thousands of pounds. Don't assume your regular accountant is up to date on disposal tax planning. Ask directly. If they hesitate, that's your answer.

Wealth manager or financial planner

Often forgotten, but worth a conversation early. Selling a business means a lump sum that has to last decades. How are you going to invest it? What income do you actually need? What about inheritance tax? Getting this advice in place before completion means you negotiate from a position of clarity. You know the exact number you need to walk away with.

One note on fees. It's tempting to skimp on advisers. The wrong team, or no team, will cost you far more than their fees. A corporate finance adviser who lifts your multiple by half a turn more than pays for themselves. A solicitor who catches a badly drafted warranty clause saves you from a post-completion claim that could swallow a chunk of the proceeds. Think of these costs as part of the deal, not as overheads to squeeze.

You can look at NewOwner's plans to see what's available when you're ready to take the business to market.

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

Here's a realistic breakdown.

Months 1-6: Preparation. Getting the business actually ready. Cleaning up accounts, documenting processes, sorting legal gaps, reducing owner dependence, diversifying the customer base if you can. This is also when you build your advisory team and get a realistic valuation. Many owners spend 12-18 months in this phase, and from what I've seen, the ones who do are the ones who get better prices and smoother transactions. The ones who skip it tend to find out the hard way during due diligence.

Months 6-9: Going to market. Your adviser prepares the information memorandum and starts approaching buyers, either through targeted outreach or a more controlled marketing process. You'll sign NDAs, field early questions, and try to balance running the business with managing the sale process. This is where having a management team you actually trust becomes essential. If everything still has to come through you, this phase will eat your life.

Months 9-12: Offers and negotiation. If the marketing generates interest, you'll start getting indicative offers (often called "heads of terms" or "letters of intent"). They're non-binding. They sketch out the headline price, the structure, the key conditions. Negotiating these terms is a real 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 go through 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, full stop. It's intrusive, time-consuming, and almost always throws up issues that lead to renegotiation. And you're still running the business while it happens.

Month 18+: Completion. The sale and purchase agreement gets signed. Funds transfer. Champagne, possibly. Then the handover period kicks in, which can run from three months to a year or more.

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

Things that slow it down: messy financials, unresolved legal stuff, buyer financing falling through, arguments on price or terms, and the occasional external shock like an interest rate move or a regulatory wobble.

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

The thinking stage has value on its own, because it forces you to look at the business through a buyer's eyes. That shift in perspective tends to make you a better owner whether you ever sell or not.

If you're ready to move from thinking to doing, here are five things you can actually 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 give you, financially, personally, professionally? Get this clear and every decision that follows gets easier.

2. Run a rough valuation. Take last year's EBITDA, adjust for the obvious owner-specific items, and multiply by 4. That gives you a ballpark enterprise value for a typical UK SME. Crude, yes. But it tells you whether the number in your head is in the right postcode.

3. Identify your biggest vulnerability. Is it customer concentration? Owner dependence? Messy accounts? A pending legal issue you've been ignoring? Whatever it is, that's where preparation pays off first.

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

5. Start looking at the market. See what businesses similar to yours are listed for, how they're described, what they put up front. NewOwner's sell-business page is a sensible place to start.

Selling a business you built is a serious financial and emotional event. Treat it as a process, not a transaction, and you'll almost always end up better off than the owners who rush. You don't need to decide today. But starting to prepare? You can do that this afternoon. For the full process walkthrough, read our step-by-step guide to selling a business in the UK.

For independent background, the British Business Bank's guide to selling your business gives a solid overview of the key steps and the things to watch out for.