A comprehensive guide to selling your small business or startup for entrepreneurs

Selling your business is a big step, and it takes clarity and confidence to get it right. This guide helps UK founders and small business owners navigate the process with clarity—from timing and taxes to buyers and deal structure.

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Choosing the right time to sell your business

Deciding when to sell is one of the most important choices you’ll make. It’s not something to rush, and it’s not as simple as waiting for a good offer. Timing shapes everything. From how buyers view your business to the final price you walk away with. It's helpful to know what to look out for so you can sell in a way that will fit your goals.

Below are factors that can help you decide:

• Strong business performance: Buyers are more likely to offer higher prices when your revenue, margins, and operations are trending upward.
• Favourable market conditions: A healthy market can do the heavy lifting for you. Interest rates, buyer appetite, and industry demand can influence deal value. Selling into a hot market can boost your valuation - even if your business isn’t peaking.
• Personal goals or lifestyle changes: Being financially ready is not the only thing that matters to many founders. If you’re thinking about retirement, looking to reduce stress, or ready to start something new, you should consider selling.
• Incoming unsolicited offers: When potential buyers approach you with good offers, it can be an indication that your business is valuable in the current market. You might not have been planning to sell, but outside interest can serve as an indicator to review your situation and look at your options.
• Readiness for new investment or expertise: The next step for growth might need more than you can or want to invest. When you believe that your business needs new management or resources to thrive, selling a portion or the entire company may be the best solution to enable its growth.
• Risk and uncertainty in the future: When new regulations or economic pressure are disrupting your industry and you anticipate problems maintaining your current performance, you may want to sell. Selling when there are no headwinds to affect your figures will help you to lock in value and avoid surprises in the future.

By considering these factors, you are in a better position to think through them and have more control and clarity. It prevents hasty decisions and leaves you in a position to sell with confidence, rather than under pressure.

What exit options are there?

When you choose to exit your business, the path you choose is as important as the time. Your exit plan outlines the next step. It could be a complete exit, a partial sale, or continued involvement in the company's growth. Below are some of the options available.

Trade sale

This is one of the most common exits for small business owners. A trade sale is where you sell your business to another business in the same or a related industry. Trade sale buyers typically want to grow their market, gain new capabilities or remove competition. The sale is usually a complete handover, and it’s the best way to go if you wish to have a clean break. Since the buyer is already familiar with your industry, it might be easier and faster to close the deal.

Private equity sale

The typical private equity investor seeks an expanding business capable of growth. This path can leave you in the business longer than a trade sale. You can sell most of the shares and retain some stake in the business.This will enable you to mitigate personal risk and have capital to reinvest, and you will still be in charge of the business with the help of experienced financial partners.

Initial Public Offering

When you list your business on the stock exchange, you expose it to public investors. This path has the potential to provide a high valuation, especially in the event of good market conditions. However, initial public offerings are time-consuming and complicated. They also require high regulatory standards. They suit businesses that have good financial histories and are able to scale.

Sale to a family office or individual buyer

You can sell your business to a family office or a high-net-worth individual. These buyers often prioritise long-term value over immediate gain. It can be a more flexible process, and you may be able to negotiate terms that best fit your vision of the future of the business.

Employee ownership trust

Selling your business to an employee ownership trust (EOT) means selling to your team. It gives you a chance to leave slowly and preserve the culture and legacy of the company. Tax regulations in the UK offer capital gains tax relief when selling to EOT,¹ which makes this a cost-effective path for businesses that qualify.

Joint venture

A joint venture is an agreement to create a new partnership with another company to achieve a common business objective. Although it’s not a complete exit, it may result in new funding, risk sharing and increased opportunities. It is a means of selling the business in a new direction but maintaining an interest in the future success.

Each of these options has a different purpose. The right one is based on your long-term interests, the maturity of your business and the level of involvement you desire once the deal is closed. You can choose to leave on your terms by planning and knowing what each path has to offer.

How to sell your business, step by step

Selling a business is an organised process that involves planning, timing, and effective execution. This step-by-step process explains how to sell a business, from preparation to closing the deal.

Step 1: Know why you're selling

Buyers will want to know why you’re selling, and you must be in a position to explain. So, you should ask yourself, “Why am I selling my business?” Are you retiring, starting something new, or just taking a step back? Knowing why shows that you’re not selling in panic, which builds trust.

Step 2: Get your business sale-ready

Before listing, review your operations. Clean up your books and tighten contracts. Buyers will examine your financials, procedures, and customer relationships. A well-managed business often sells itself and at a higher price. Build your team, document key processes, and ensure daily operations can run without you. Step back from the centre of the business. Buyers want confidence that it can grow without your involvement, which makes it more attractive.

Step 3: Conduct business valuation

Value your business to set a reasonable price. You can do this with the help of a business valuation specialist. A good valuation will take into account earnings, assets, industry trends and growth potential. It gives you a realistic expectation and a reference point in the negotiations.

Step 4: Choose who will handle the sale

You may sell it yourself or hire a broker. Selling your business is effective if you’re selling to someone you already trust. Otherwise, a broker can assist you in contacting more serious buyers, negotiating back and forth, and getting a better price.

Step 5: Gather your documents

Organise your financial books, balance sheets, tax returns, and profit statements. Define your major assets, employee positions, leasing conditions, and agreements. When everything is in order, due diligence becomes easier and shows buyers that you're serious.

Step 6: Find the right buyer

Market your business discreetly and professionally. Contact qualified buyers using networks, platforms or a broker. Ensure that they have the means to buy it first before you divulge sensitive information. Always ensure an NDA is in place before sharing sensitive business information.

Step 7: Finalise the terms and close

Once you have agreed on a price and terms, you need to hire a lawyer to draft the necessary contracts. Depending on the deal, contracts may include share or asset transfers, leases, and warranties. Review the terms thoroughly before you sign.

Step 8: Plan what comes next

The sale is not the endgame. Spend some time determining how to manage the money, pay taxes, and plan for the future. It’s important to talk to a tax or financial advisor as early as possible.

💡 Read how to value your business methods

Top tips to successfully sell your business

Knowing when and how to sell your business isn't enough. You need strategies on how to successfully sell it. Here are the top tips for selling your business:

Decide between cashing out or staying in control

Clarify whether your goal is to access liquidity or maintain influence in the business after the sale. Giving up both at once can leave you stuck, especially in volatile markets. Structure the deal so that you protect at least one. Either retain some control or ensure you’re walking away with a clean financial exit.

Honour your strategic relationships

Good relations with distributors and suppliers and may directly affect your sales. Buyers will be interested in the stability of your external relationships. Stay in touch with major stakeholders throughout the process. A history of working together can result in more favourable terms and valuations when a trusted partner becomes a potential buyer.

Understand buyer categories

There are different types of buyers:

• Cash-flow buyers tend to desire a fast payoff
• Competitors might be interested in buying your customer base or technology, particularly when it gives them a competitive advantage
• Strategic buyers are long-term players. They find value in your team, brand and systems since it aligns with their wider objectives

Understanding the type you are talking to will make you present your business in a way that will connect.

Read market timing

When to sell is usually less about what you want to achieve internally and more about what the market is doing. You might need to move quickly, especially when valuations are high or there is a strong buyer demand in your sector. Waiting for ideal conditions can backfire. Selling when you're strong gives you an advantage.

Keep communication clear and consistent

Transparency and timing are important. When the time is right, inform employees about the sale, and be honest and straightforward about what it means for them. Also, ensure that your broker, legal team and advisers are all on the same page so that there are no misunderstandings or delays.

Factor taxes Into your negotiation

You have to pay tax for selling a business in the UK.² This can significantly affect what you leave with after the sale. You can either be eligible for relief schemes or have increased tax liability, depending on the structure of your deal.³

Discuss the tax implications with your financial advisor as soon as possible and use this information to frame your strategy before committing to final terms.

💡 Read more on business asset disposable relief

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Sources used in this article:

1. UK Gov – Taxation of Employee Ownership Trust
2. UK Gov – Capital Gains Tax for Business
3. UK Gov – Business Asset Disposal Relief

Sources last checked: 28-Jul-2025