Why You Need to Give your Business a Thorough Health Check…
We all know that it’s important to keep our minds and our bodies healthy, a fact that has become even more relevant over the last year. But our health, and particularly our mental health, can be disguised by the right wardrobe or the right attitude. In the same way, the underlying health of your business can be disguised by a well polished website and some good financials.
Traditional valuation methods would have you believe that the value and therefore saleability of your business is exclusively dictated by the financials. But what differentiates you from other businesses and what really adds value is that which is below the surface.
So, assuming you know that things below the surface of your business aren’t quite as healthy as the external appearance suggests, what can you do about it? Well, the most important thing to say is don’t despair… recognising that things aren’t quite right is the first step to making them better.
The second thing to suggest is to get some advice from an experienced and trustworthy source. Knowing that something isn’t right and identifying exactly what it is and how to fix it are very different things. I know that if I am overweight, I need to adjust my diet and exercise, but if I speak to a fitness coach and a dietician, I know they will suggest things I would otherwise not have thought of.
Thirdly, give yourself time. Change takes time but, particularly if you are thinking of selling your business, time may feel like a luxury you don’t have. But in most cases the time taken now to get it right will be more than worthwhile later down the line. Part of the service offered by Entrepreneurs Hub is working with business owners to help them prepare their business for sale, and then take them to market. The preparation phase can easily last for several months, but the investment into the business over time can have a dramatic impact on value and also on exit terms.
But what if you don’t know there is anything wrong under the surface? If everything seems to be running well and there are no outward signs, it is either because everything really is fine or there might be something there you just aren’t aware of.
You need to take a step back and look at your business with detached and dispassionate eyes… not very easy for most business owners I know. You may be fortunate enough to have a close and trusted friend who is in business and you can ask to help. You should ask them, or yourself, the question – if I were looking at buying this business, knowing what I know, is there anything that would worry me?
Of course, you can always ask an independent, experienced adviser like Entrepreneurs Hub to give your business a full health-check and report back. If you would like to talk to us in strict confidence and with no obligation, please do drop us a line.
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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 around 12 to 18 months from initial preparation to completion, although some transactions may be quicker or take longer. The timeline depends on business readiness, buyer demand, deal complexity, due diligence and how quickly the legal terms can be agreed.
Preparing accurate financial information and organising key documents in advance can help reduce avoidable delays. Read our complete business sale timeline to understand 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, its future growth is clear and you are not under pressure to complete a sale. Buyers are generally more attracted to businesses with rising or stable profits, reliable financial information and credible opportunities for further growth.
Business owners are often in a stronger position 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 the owner
- There is a capable management team in place
- The owner has started preparing well in advance
Market conditions can also affect buyer appetite and valuation. Factors such as sector growth, access to finance and competition between buyers may support stronger deal activity, but preparation and business performance are usually more important than trying to identify a perfect month to sell.
Ultimately, the best time to sell is when both you and the business are ready, and the company can demonstrate sustainable performance and future value to potential buyers.
Use our Exit Readiness Tool to assess how prepared your business is, or read our guide on when to sell your business for further guidance.
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?
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…
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.