How to prepare a business for sale: a guide for founders
Most of what decides the price, the terms and the stress of a sale is settled long before a buyer arrives.
Insights
Insights for founders: growth, value and exit
Plain-English guides for UK founders and owner-managers on preparing a business for sale, what drives its value and the routes out. Written for general information, and sourced only from authoritative UK bodies.
- Guides
- Ten, and a glossary
- Reading time
- 89 minutes in all
- Sources
- GOV.UK, HMRC, British Business Bank, ICAEW, Acas
- Updated
Start here · Guide 01
How to prepare a business for sale: a guide for founders
Most of what decides the price, the terms and the stress of a sale is settled long before a buyer arrives. This guide sets out what to prepare, in what order, and where to bring in professional advice.
Inside this guide
The library
Every guide, by topic
Ten guides that follow one founder question from start to finish: will this business reward you today, and let you exit on your own terms? Each one maps to the SCALE2SELL® framework.
What makes a business worth more? The value drivers buyers look for
Two businesses with the same profit can sell for very different prices.
How to make your business less dependent on you
If the business cannot run without you, a buyer is really buying your time, and they will price it accordingly.
Customer concentration risk: what it is and how to reduce it
When a large share of your revenue depends on a few customers, whoever takes the business on inherits that risk, and they will allow for it.
Exit routes explained: the main ways to sell, pass on or step back
There is more than one way out of a business.
How long does it take to sell a business?
The honest answer is that it depends, and mostly on how prepared the business is before the process begins.
Exit planning vs succession planning: what is the difference?
The two terms are often used as if they mean the same thing.
Management buyouts explained: selling to your own team
Selling to the people who already run the business can protect its culture, its customers and the team you built.
Due diligence: what a buyer will check, and how to prepare
Due diligence is where a buyer tests everything you have told them.
How to write an exit plan: a template for founders
An exit plan does not need to be long.
Quick answers
Questions founders ask
Jump straight to the part of a guide that answers the question on your mind.
- When is the best time to sell a business?Guide 01
- What should I do first if I might sell in a few years?Guide 01
- How do buyers put a price on a business?Guide 02
- Is valuation mapping the same as a valuation?Guide 02
- How do I know if the business depends too much on me?Guide 03
- How do I hand over customer relationships?Guide 03
- How do I measure customer concentration?Guide 04
- Is there a safe share for my largest customer?Guide 04
- What is an employee ownership trust?Guide 05
- How does a management buyout work?Guide 08
- How is a management buyout funded?Guide 08
- Is exit planning the same as succession planning?Guide 07
- What will a buyer check in due diligence?Guide 09
- What is a data room?Guide 09
- What is vendor due diligence?Guide 09
- What should an exit plan include?Guide 10
- What are the stages of selling a business?Guide 06
- What slows a business sale down?Guide 06
Reference
Selling a business: the words explained
Heads of terms, earn-outs, warranties, TUPE: the vocabulary of a sale, defined in plain English, each term linked to the guide that covers it in depth.
Our editorial standard
How we write these guides
- 01
UK sources only
Every figure we use links to an authoritative UK source: GOV.UK, HMRC, the British Business Bank, ICAEW or Acas.
- 02
No invented numbers
Where we cannot source a figure, we leave it out. That includes the rules of thumb on multiples, percentages and average sale times that circulate online.
- 03
General information, not advice
Our guides explain; they do not advise on your circumstances. Take independent legal, tax and financial advice where appropriate.
- 04
Written from the founder’s side of the table
Stratworth Advisory is led by Nik Spencer: 34 years of founder experience and 3 successful business exits.
Next step
Where does your business stand today?
Take the free Readiness Assessment to score your business across the eight pillars, then talk it through with Nik on a complimentary Founder Conversation.