Selling Your Business: A Numbers Game
Many things in life seem to boil down to being a numbers game – including how to sell a business. Numbers are everywhere… Turnover, EBITDA, valuation range, offers, approaches, prospects and so on. Wealth Managers are understandably a go-to advisor for many considering the numbers in their life. At Entrepreneurs Hub we thrive on cultivating good relationships with Wealth Managers because we know they are extremely important in helping our clients understand the one number that can make all the difference but is often misunderstood.
Call it what you like; golden number, magic number or lifetime cashflow; it is a number that is essential for any business owner to know. It is the answer to the question:
How much do you need to walk away with to live the life you want to live?
The reason it is so often misunderstood is that, firstly, it is not necessarily the same as what you want to walk away with, and secondly, it is a very complex thing to work out. If I were to ask you to take a guess at what you thought it would be, I can virtually guarantee you it would be wrong. In fact, for the majority of business owners, it is probably a lot less than you think.
Wealth Managers play an important role in helping to assess and calculate what you will need to realise from a sale to maintain the lifestyle you want to have. It can be a powerful number when it comes to negotiating a deal. Why is this? Because you will have a better understanding of what various offers mean to you.
It may also help in your decision making of how to approach a sale. For example, a significant gap between the number calculated by your Wealth Manager and your professional valuation range may result in you taking a different preparatory path. Entrepreneurs Hub regularly works with clients for many months prior to taking a company to market, so that the business can be given the injection of growth or stability it requires to meet its full potential.
So, whatever you call it, it’s a very useful number to know – but I said earlier it was complex to work out. You have to factor in a number of variables, all of which will change over time. Tax incentives, cost of living, income from investments, life events, dependents, healthcare etc… Because it is impossible to know the future, these have to be calculated with a degree of probability factored in so that you get a number that will stand up to the march of time.
As mentioned above, the best way to get a handle on this number is to speak to a trusted Wealth Manager. Once you have your number, you then need to get an idea of what your business is worth. Entrepreneurs Hub will work with your Wealth Manager to offer free, no obligation business reviews which come complete with a guide valuation range.
If you want to understand what your business could be worth and begin planning for a sale then please do get in touch and we will be delighted to meet with you.
If you are a Wealth Manager and would like to speak to us about referring one of your clients or working with us, we will be delighted to hear from you too.
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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 by applying a multiple to its sustainable profit, often EBITDA or adjusted net profit. The appropriate multiple depends on factors including growth, recurring revenue, customer concentration, management strength, owner dependency, market conditions and buyer demand.
Determining what your business is worth involves more than applying a simple formula. Use our Business Valuation Calculator to obtain an initial valuation range, or read our simple business valuation guide to understand the factors buyers consider.
How long does it take to sell a business?
Selling a business in the UK typically takes 12 to 18 months from initial preparation to completion, although the formal sale process itself may take around 6 to 9 months once the business is ready to go to market. The exact timeframe depends on factors such as how prepared the business is, buyer demand, the complexity of the transaction, due diligence and how quickly legal and commercial terms can be agreed. Preparing financial information, contracts and other key documents in advance can help reduce delays and make the sale process more efficient. Read our complete business sale timeline to see what happens at each stage.
When is the best time to sell a business?
The best time to sell a business is usually when it is performing strongly, has clear growth potential and you are not under pressure to complete a deal. Buyers are typically more attracted to businesses with stable or rising profits, reliable financial information and credible opportunities for future growth.
You may be in a stronger position to sell when:
- Revenue and profits are growing or consistently strong.
- Financial records are accurate and up to date.
- Future growth opportunities can be clearly demonstrated.
- The business is not overly dependent on you.
- An experienced management team is in place.
- You have prepared for the sale well in advance.
Market conditions can also influence buyer appetite and valuation. Sector growth, access to finance and competition between buyers may support stronger deal activity. However, the performance and sale-readiness of your business are usually more important than trying to identify the perfect month or year to sell.
Ultimately, the right time to sell is when both you and your business are ready, and the company can demonstrate sustainable performance, manageable risk and future value to potential buyers.
Use our Exit Readiness Assessment to assess how prepared your business is.
Do I need an adviser to sell my business?
You are not legally required to use an adviser to sell your business, but many owners appoint an experienced M&A adviser to help manage the process. An adviser can prepare the business for sale, identify and approach suitable buyers confidentially, coordinate negotiations and support the transaction through due diligence.
The right adviser can also help create competitive tension, protect your time and reduce the risk of avoidable mistakes. Read our guide to choosing the right business sale adviser to understand the different types of support available.
How do I prepare my business for sale?
Preparing a business for sale involves strengthening its financial performance, reducing risk and making sure it can operate successfully without heavy reliance on the owner. Buyers will also expect accurate financial records, clear contracts, organised documentation and evidence of future growth.
Preparation should ideally begin well before approaching the market, giving you time to address weaknesses that could affect value or delay the transaction. Use our Exit Readiness Tool to assess how prepared your business currently is.
How is confidentiality protected during a sale?
Confidentiality is protected through controlled information sharing, anonymised buyer approaches and non-disclosure agreements. Potential buyers usually receive limited information at the start of the process and must sign an NDA before commercially sensitive details are released.
Prospective buyers should be assessed before receiving further information, with documents shared gradually according to their level of interest and credibility. A well-managed process also allows the business owner to retain oversight of who is approached and what information is disclosed.
What documents do I need to sell my business?
The documents needed to sell a business commonly include financial accounts, management information, forecasts, customer and supplier contracts, employment records, tax information and evidence of intellectual property ownership.
Buyers may also request details of property, insurance, legal disputes, regulatory matters and company ownership. Organising this information before due diligence begins can reduce delays and help maintain buyer confidence. Our Business Sale Due Diligence Checklist explains the main information buyers are likely to request.
What’s the quickest way to sell a company?
The quickest route is usually a sale to a buyer who already knows your business, such as a competitor, a supplier or your management team, or to a buyer with funds ready. Even then, legal work and due diligence normally take two to three months. Speed usually costs money: with only one buyer at the table there is no competition on price. If timing matters, tell your adviser at the start so the process can be built around it.
Can I sell my business online?
You can list a business on an online marketplace, and for very small businesses this can work. For businesses with a value above around £2m, public listings carry risks: staff, customers and competitors may spot the sale, and the buyers who respond are rarely the best fit. A managed process that approaches selected buyers confidentially usually produces stronger offers and protects the business while it is for sale.
How can I increase the value of my business before selling?
You may be able to increase the value of your business by improving sustainable profits, developing recurring revenue and reducing reliance on individual customers or the owner. Buyers also value capable management teams, reliable financial reporting, scalable operations and clear opportunities for future growth.
The earlier you identify the factors affecting value, the more time you have to make meaningful improvements. Use our Business Valuation Calculator for an initial indication of value and our Exit Readiness Tool to identify areas that may need attention.