Selling your business in the next three years: start preparing now
Buyers pay for profits they can trust, a business that runs without its owner and no surprises in due diligence. Most of that takes years, not months, to put in place.
The value of a business is set long before a buyer calls. It is in the quality of the earnings, the strength of the team, the spread of customers and how easily someone else could run it. Each of those can be improved, but rarely quickly.
A three-year runway
- Year 3Clean accounts, monthly management figures, and a plan to reduce reliance on you
- Year 2A second tier of management, written processes, and contracts with key customers and suppliers
- Year 1A data room of documents, tax and legal matters tidied, and advisers in place
- SaleDue diligence answered quickly, because the answers already exist
What buyers look for
- Profit that recurs, with one-off items clearly separated.
- No single customer that accounts for a large share of sales.
- A team that keeps the business running without the owner.
- Clean tax affairs, with no unresolved HMRC enquiries.
Tax timing
Business Asset Disposal Relief charges 18% on qualifying gains, on up to £1 million of lifetime gains until 5 April 2027 and £500,000 after that. Founders’ Relief, at 10% on up to £10 million, will suit only founders of qualifying high-growth companies. Tax should not set the date of a sale, but it belongs in the plan.
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This insight is general information, not advice for your circumstances. Talk to us before acting on it.