Prepare the business before approaching buyers. Organise accounts, tax records, leases, licences, employment arrangements, supplier agreements and details of owned assets. Buyers usually want evidence that reported earnings are repeatable, not simply a strong recent month. Separate personal expenses from business costs where appropriate and explain unusual items clearly. This process is often called normalisation: adjusting financial results to show the earnings a buyer could reasonably expect under ordinary operations. For example, a one-off legal bill may be removed from an earnings calculation, but regular private spending should not be disguised as exceptional.
Obtain an independent valuation before setting a price. A valuation is an informed opinion of worth based on evidence, assumptions and an appropriate method, rather than a guess based on turnover alone. An adviser may examine comparable transactions, the value of assets, or maintainable earnings. Earnings before interest, tax, depreciation and amortisation, commonly called EBITDA, is one measure of operating performance, while seller’s discretionary earnings may be more useful for a small owner-managed firm. Each measure needs context. A growing software business and a local plumbing firm should not be assessed in exactly the same way.
Choose an adviser according to the complexity of the sale, not just the quoted fee. Ask how the person will gather information, test assumptions, protect confidential details and explain the result in plain English. A valuation specialist can help establish a defensible range, while a broker may focus more on finding and managing buyers. You may need a solicitor and accountant as well, particularly where shares, property, employees or tax are involved. Ask for a written scope, expected deliverables and any conflicts of interest. A provider familiar with business valuation services can be useful when the price needs careful support.
Create a controlled buyer process. A confidentiality agreement, sometimes called a non-disclosure agreement, limits how sensitive information may be used, although it does not remove every risk. Share an initial information pack without revealing unnecessary customer or supplier identities, then provide deeper records to serious candidates. Due diligence is the buyer’s investigation of finances, legal obligations, operations and commercial risks. For example, a buyer may discover that a key customer has no written contract or that a lease cannot be transferred without consent. Finding such issues early gives you time to fix them or price them honestly.
Negotiate the whole deal rather than focusing only on the headline price. Consider whether payment is entirely upfront, deferred, conditional on future performance or partly held back. An earn-out links some payment to agreed results after completion, but it needs precise definitions, reporting rights and decisions about who controls the business during that period. Working capital also matters. It means the short-term resources needed to keep trading, such as stock, invoices owed and ordinary bills. Agree which assets, liabilities, stock level and debts are included. Obtain independent legal and tax advice before signing, including advice on possible capital gains tax.
Plan completion and the transition as carefully as the sale itself. Prepare a schedule covering staff communication, customer introductions, passwords, equipment, records, insurance and notices to landlords or suppliers. If the buyer relies on your knowledge, put the length and limits of your handover in writing rather than treating it as an informal promise. Keep copies of important records and document what has been transferred. A sound process leaves both sides clear about price adjustments, warranties, restraint clauses and responsibility for earlier problems. Comparing valuation advice, sale support and legal review before choosing providers can help you proceed with fewer avoidable surprises. independent valuation advice can be one part of that comparison.
