First, the honest timescale

A well-prepared business sells in six to twelve months from decision to completion. An unprepared one takes longer and sells for less — and the single most expensive sentence in this whole subject is "I want to be out by Christmas." Buyers can smell a deadline, and every week of pressure transfers money from your side of the table to theirs. If you can start preparing a year or two before you need to sell, most of what follows becomes easy; if you can't, the order below still holds — you just compress it.

Step one — know what it's worth, on the buyer's arithmetic

Nearly every small UK business sells on adjusted profit × a sector multiple. Not turnover, not what you need for retirement, not what a competitor supposedly got. Work out your adjusted profit properly — profit before tax, plus your own salary and benefits, minus the market cost of replacing you, with one-offs stripped out — and apply an honest sector range. Our free valuation calculator does exactly this and explains the method. Sellers who arrive knowing this number negotiate from strength; sellers who arrive with a fantasy number waste a year discovering the market disagrees.

Step two — prepare the business, not the brochure

Buyers pay for transferable, evidenced profit. In practical order of impact:

• Make yourself less necessary. Owner-dependence is the number-one discount. Document how things run, push relationships onto your team, take a proper holiday and let the business prove it survives.
• Clean, current accounts. Up-to-date bookkeeping, filed accounts, reconciled everything. Messy books read as risk, and risk is priced.
• Spread the customers. One client over about 20% of sales frightens buyers. Even modest diversification in the final year helps the story.
• Put contracts in writing. Customer agreements, supplier terms, staff contracts, the lease. Handshakes don't survive due diligence.
• Tidy the edges. Settle disputes, sort the director's loan, take the personal expenses out of the company. Every oddity a buyer finds becomes a price conversation.

Step three — find the buyer

Small businesses sell to five kinds of buyer: a competitor or trade buyer (usually pays best for strategic fit), an individual buying a livelihood (often the most motivated), your own management team (an MBO — quiet, fast, but needs funding), a small acquisition company like ours, or occasionally a supplier or customer securing the relationship. Brokers can reach buyers you can't — but understand the economics: commissions commonly run 5–10% on small deals, some charge upfront fees regardless of result, and a broker's incentive is a completed deal, not your best deal. Direct approaches — a discreet letter to the obvious trade buyers — cost nothing and often work. And this is where we declare our interest plainly: Edwards Bros buys good small businesses, particularly from retiring owners, with no broker and no fees in either direction. If that's your situation, the conversation can simply start here.

Step four — structure: the part that rescues most deals

The gap between what buyers can fund and what sellers want kills more small deals than price disagreement — and the tool that bridges it is vendor financing: you receive part of the price over two or three years from the business's own profits. It sounds like a concession; done properly it's leverage — you'll often achieve a higher total price by offering terms, it signals confidence that makes lenders back the buyer, and it widens your buyer pool enormously. Secure it properly (charges, personal guarantees, acceleration on default — your solicitor's job) and it is the most under-used tool in small-company sales. The related choice — asset sale versus share sale — changes your tax, your liabilities and the buyer's appetite, and deserves advice before heads of terms, not after: our plain-English guide to that choice explains why the same headline price can leave very different money in your pocket.

Step five — heads of terms, due diligence, completion

Once a buyer is serious: agree heads of terms (price, structure, timetable, exclusivity — not legally binding, but hard to renegotiate honourably); survive due diligence, where the buyer's team verifies everything you've claimed — this is where preparation pays or its absence is priced; then the sale agreement, with warranties you should actually read, and completion. From heads of terms to completion, three to five months is normal with solicitors who know company work.

The tax paragraph everyone skips and shouldn't

Capital gains tax applies to your sale proceeds, and Business Asset Disposal Relief (the old Entrepreneurs' Relief) can reduce the rate on qualifying gains up to a lifetime limit — but the qualifying conditions have to be met before the sale, some for a minimum period, and the relief has been repeatedly tightened. The structure of the deal (asset vs share, earn-outs, vendor loans) changes the tax answer materially. Take proper advice a year before selling, not the week after — the difference is routinely tens of thousands of pounds.

Thinking about it — even vaguely?

Start with the number: run the valuation calculator and see what the buyer's arithmetic says today. If the answer interests you — or if you'd simply like an honest, no-obligation conversation with a buyer who isn't charging you anything to have it — write to peter@edwardsbros.co.uk. Worst case, you'll get a straight opinion from a chartered accountant about what your business is worth and what would make it worth more.

This page is general information, not financial, tax or legal advice — take professional advice on your specific sale, particularly on tax, before agreeing anything. Edwards Bros (Spaldwick) Ltd, registered in England & Wales no. 00598511.