Considering Selling Your Business? You’re Not Alone
I read a statistic recently that claimed over 60% of business owners are considering selling a business in the next five years. It’s an interesting statistic that highlights a trend we have noticed in our own discussions with business owners. The last 18 months has been challenging for many, and a time to reflect for all of us. Whether 60% is entirely accurate or not, we know that a lot of business owners will be asking questions right now: How much is my business worth? How to sell a business? Where can I get help to sell my business? Let me just take a few minutes to suggest some of the answers to those questions. If you are one of the many thinking about selling, I hope this helps.
Valuation:
There are many ways to value a business, but most of them boil down to accountancy and mathematics. Multiples applied to historic turnover or profit figures. But we all know that there is more to your business, and its value, than just past performance. Any acquirer wants a well-performing business, but they are also interested in future growth, diversification, skills, markets, clients, technology and a host of other things that a simple multiple of historic EBITDA fails to take into consideration. If you want to know what your business is really worth, you need to take a broader perspective. And if you want an acquirer to pay what it is really worth, you need to show them that you understand why they should.
How to sell:
There are two broad categories of approach when it comes to selling – active, or passive. A passive approach might be to simply wait for someone to get in touch an make an offer, or a slightly more intentional version is to advertise your business for sale on one or more of numerous broker lists out there. At the other end of the spectrum is the approach we favour. An active approach to selling your business is the only way to ensure you can be certain that you have found the best acquirer and got the best value available for your business. By identifying and approaching strategically selected acquirers, you maximise the most important aspect of any sales strategy – choice. If you have a choice from a number of good options then you hold all the cards.
Getting help:
If we are to see a strong rise in the number of business owners selling their businesses in the next 5 years then, like in any market dynamic, we are going to see it becoming more favourable for the acquirer. This will make it even more important to get good advice and solid support from a trusted corporate finance adviser like Entrepreneurs Hub. Of course you’d expect me to say that, but I think my reasoning is fairly easy to defend. Firstly, any business that is to be sold needs to stand out from the crowd. A company like ours can help accentuate the things that make your company unique, and also work with you to build those areas of uniqueness so that you stand head and shoulders above the rest. Secondly, once you have caught someone’s attention, you need a blend of experience and expertise to see it across the line. If you are one of those business owners thinking about selling, we’d love to speak to you.
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FAQs – Selling Your Company
How do I sell my business in the UK?
Selling a business in the UK typically involves preparing financial information, obtaining a valuation, identifying suitable buyers and negotiating the terms of a sale. Most owners work with an M&A adviser to manage the process confidentially, approach qualified buyers and maximise the value achieved.
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
What is my business worth?
A business is typically valued using a multiple of its profit, usually EBITDA or adjusted net profit. The multiple depends on factors such as growth potential, recurring revenue, customer diversification and management strength. Professional valuation provides a realistic price range and helps position the business effectively for buyers.
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell a business?
Selling a business in the UK typically takes between six and nine months from preparation to completion. The timeline depends on business readiness, buyer demand and the complexity of due diligence. Early preparation and clear financial reporting can help shorten the process.
When is the best time to sell a business?
The best time to sell a business is when it is performing strongly, growth prospects are clear and you are not under pressure to sell.
Business owners often achieve the strongest outcomes when:
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Profits and revenue are growing
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Financial records are clear and well prepared
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There is visible future growth for buyers
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The owner has planned the sale 12–18 months in advance
Market conditions can also influence valuations. Strong buyer demand, sector growth and favourable economic conditions can increase acquisition activity, but a well-prepared business can attract interest in most markets.
Deal activity often increases during spring and autumn, although transactions complete throughout the year. In practice, preparation and business performance usually matter more than trying to perfectly time the market.
Ultimately, the best time to sell is when both the business and the owner are ready, with the company positioned to demonstrate strong value to potential buyers.
Do I need an adviser to sell my business?
Many business owners choose to work with an M&A adviser to manage the sale process. Advisers help value the business, approach qualified buyers confidentially and negotiate terms. This structured approach can increase the likelihood of achieving a higher value and a successful transaction.
How is confidentiality protected during a sale?
Confidentiality is protected through controlled information sharing, anonymous buyer approaches and strict non-disclosure agreements. Potential buyers receive limited information initially and must sign an NDA before any sensitive details are released. Business owners approve prospective buyers and maintain visibility over all documentation throughout the process.
How do I value my business before selling?
Valuing a business before selling usually involves analysing profitability, identifying valuation multiples and assessing key value drivers such as recurring revenue and customer concentration.
What’s the quickest way to sell a company?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
What’s the best way to sell a business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…