Know When you’ve Won (and it’s Time to Sell Your Business)
Professional success can be addictive. While that ‘addiction’ has probably been a pivotal factor in you becoming the accomplished entrepreneur you are today – with the prosperous company to prove it – it can mean you become blinkered to the bigger picture and you might miss the signs that it’s time to sell a business.
The ‘bigger picture’ looks different for everyone. For those early on in their career, it might mean moving onwards and upwards towards a more challenging business opportunity elsewhere. Maybe you’ve taken this particular venture as far as you set out to. The more experienced business owners amongst you might be thinking about cashing in a lifetime of hard work so you can retire and spend more time with family. Others might feel money rich but time poor, just craving more time for themselves with less of the daily demands that can go hand in hand with running a thriving enterprise.
Winner takes all
Entrepreneur’s Hub Director, Malcolm Murray, recalls a conversation he had business owner a few years ago who was coming to the realisation that it was the right time to sell his business.
“He said there were two signals that highlighted to him that it was time to sell – the first being he couldn’t switch off from his business, even when he was on holiday. Time off is a key part of sustained productivity, not to mention good health. But he said what really showed it to him was something his wife said – you need to know when you’ve won.”
What she meant by that is that he had accumulated significant financial assets for his family, the business was going well… yet it he could keep chasing the next thing, and the next, and the next if he let his addiction to achieving more and more take over. Now was the time for him to step back, acknowledge the fruits of his labour and do other things with his life.
Your raison d’être = their reason for buying
A consistently strong turnover, flourishing profits and a productive workforce with desirable skills are all feathers in the cap of the ardent entrepreneur. As a business owner, you want to leave your workplace at the end of each day with the satisfaction that your business exemplifies all these features.
Throughout the many years we’ve supported business owners throughout the process of selling their company, more than a few have told us that their business success has also become part of the fabric of their identity. It’s not just a valuable asset and what you DO, sometimes it feels as if it’s who you ARE.
It’s understandable how difficult it might feel to walk away from that.
Quit while you’re ahead
Don’t be blinded by your own success. As we explained in our blog 5 Signs it’s the Right Time to Sell Your Business the same aspects that fuel you to keep going with your business are what potential buyers are looking for. Your reasons for getting out of bed each day are highly desirable selling points to them.
Being able to market your business for sale and advertise positive aspects such as keen customers, healthy figures and happy, talented staff will create a very attractive buyer proposition and allow you to command a higher price.
Become so dazed with the headiness of your career triumphs and you risk hanging on to your business too long, by which point those assets might have lost some of their worth.
How do you know you’ve ‘won’?
It can be tricky to get perspective on your own situation, so here are some questions you can ask yourself to assess where you might be in terms of your appeal to potential acquirers, right now…
- Does turnover demonstrate steady year on year growth? An upward line on the graph is a green flag to any buyer
- What does your workforce look like? A blend of seasoned experts and new talent with fresh ideas proves strong staff retention and attractiveness to the best young candidates in the field
- Are you setting trends? A new product, in-demand service and/or a renowned brand with a resonant message will be recognized by acquirers at forefront of your industry – those prepared to pay a premium for such a strategic investment
- Is there a gap in the overseas market for your offering? Even if you feel like a small fish in a big pond here in the UK, you could become the market leader in another country where the industry is less established, so consider your global appeal
- How exit ready are you? If your business is as organised as it’s successful, savvy acquirers will be hooked by the prospect of compliant and orderly documents such as contracts and leases. A lack of preparedness will give the impression of chaos behind the scenes – which is rather less appealing and could even devalue your business
Have you reached the finish line? Is it time to sell up? Entrepreneurs Hub is an experienced corporate finance company who can help you discover if it’s the right time for you to sell a business. If so, we can support you as you get exit-fit and help you sell for maximum value.
Contact us for confidential advice on 0845 067 8678 or email info@entrepreneurshub.co.uk
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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.