You’re Ready to Sell, But is Your business?
“I have found the perfect house,” my wife said. “The agent says it’s cosy and has a low-maintenance garden, and is situated in a great catchment area.” All of that sounded lovely, until we went and had a look… it was cosy alright, barely enough room to swing a cat. The low-maintenance garden turned out to be equally small and wall-to-wall patio slabs. But it was in a great catchment area, just down the road from the best school in town which meant that we were the 5th viewing of the day and there were already enough offers to push the price well over the original asking price. Needless to say, we walked away. Anyone who has bought a house will be aware of the need to take estate agent descriptions with a pinch of salt and know that you need to look under the surface to be sure what you are buying. When it comes to selling a business, any acquirer worth their salt will also know that they need to look under the surface to make sure what they are buying is worth the investment.
So what about when it comes to selling a business?
I have met many business owners who have been trying to sell their business for years, and there is no shortage of statistics that will tell you only 2 in 10 business owners successfully sell their company. If you are wondering why they haven’t managed to sell then let me explain. A buyer will look at two things when deciding whether to pursue a deal or not. Initially they will be attracted by the green lights – performance, products, markets, synergies – things they can see from the outside. But when they start to work on the deal their focus will switch to looking for red lights, or reasons they should walk away or reduce the price offered. All of these red lights revolve around risk and there are potentially hundreds of things that can raise risk in the eyes of a buyer. The link below is a 12-minute podcast that introduces five of the most common issues. These include:
- Too many SPOFs or Single Points Of Failure: over-reliance on single suppliers, key staff or customers will make a buyer nervous
- Contracts that are non-existent, verbal only, or have change of ownership clauses could derail a deal
- Poor financial accounting will make a buyer question the numbers they are basing their valuation on
- Identifying and protecting intellectual property in the business will give a buyer more confidence in what they are taking on
- Dependence on the owner is the final of the five and can be a real issue – if the business falls apart without you in it, what are they buying?
Don’t give up…
If you are ready to sell, but you suspect your business is not then don’t give up. Entrepreneurs Hub are business brokers with a difference. We are not just interested in taking your business to market, we are interested in taking your business to market in the best shape possible and as a result maximising value. We work with business owners to prepare their business for sale, however long it takes. Why don’t you get in touch and we would be happy to meet with you, in strict confidence, to discuss your situation.
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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…