Selling a Business | Is Exit The Right Option? Is a Sale Realistic? When Do You Start the Process?

Selling a business is often the culmination of years of hard work. It can unlock value, enable retirement or diversification and provide a clean transition for staff and customers. It is also a legally and commercially complex process.

Careful planning is required, ideally well before you take the business to market.

Early planning helps protect value, reduce risk and keep the transaction on timetable. 

Is selling the right option?

Being clear on motivation drives strategy and deal structure. Common reasons include retirement, succession planning, de‑risking, scaling with a strategic partner, or responding to market changes. Your reasons will inform whether you pursue a share sale, asset sale, partial exit or investment.

What should I ask myself?

• What are my objectives as a business owner? For example, full exit, phased transition or raising growth capital.
• What are my goals for the business after completion? Do I want it to retain its identity, staff and location?
• What exactly am I selling? Shares in the company, selected assets or a defined business division.
• How will a sale impact others? Consider employees, customers, suppliers, landlords and lenders.
• What are my post‑sale plans? Think about earn‑out obligations, restrictive covenants and availability for handover.

Is a sale realistic?

Is the business “buyer‑ready”? Buyers look for sustainable profits, recurring revenue, clean legal and financial records and a business that can operate without your day‑to‑day involvement. A readiness review can flag gaps early.

How do I assess realism?

• Business health: are accounts accurate and up to date? Are key contracts properly documented, assignable and compliant? Are there unresolved disputes or regulatory issues?
• Attractiveness: is revenue diversified or overly dependent on a few customers or key people? Are intellectual property, data and licences properly owned and protected?
• Potential buyers: who would value this most—trade buyers, financial sponsors, or management? What are typical valuation multiples in your sector?
• Timing: are market conditions favourable? Are there cyclical or seasonal factors that affect performance and buyer interest?

When to start the sale process?

Ideally, start 12–24 months before going to market. This gives time to improve EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation), strengthen systems and demonstrate a consistent trading story. Early preparation also shortens diligence and reduces price chips.

What should I “tidy up” first?

• Financial housekeeping: finalise statutory accounts, management information and normalised earnings. Resolve director loan accounts and intercompany balances.
• Legal housekeeping: update constitutional documents, fix cap table anomalies, renew or document key contracts, secure ip assignments, regularise data protection compliance, and settle disputes where proportionate.
• Operational resilience: reduce key‑person risk through documented processes, second‑line management, and robust supplier and customer coverage.
• Property and assets: ensure clear title, consents and compliance for premises, plant and equipment. Confirm software and ip licences are transferable.
• People and incentives: review employment contracts, handbooks, and restrictive covenants. Align any option schemes or bonuses with a sale and check leaver/vesting rules.

What about tax?

Tax planning can materially affect net proceeds. Early advice can help select between a share sale and asset sale, structure consideration (cash, deferred, earn‑out, loan notes), and optimise reliefs where available. Consider personal tax, shareholder alignment and international elements if applicable. Build time for pre‑sale restructurings, such as hive‑downs or group simplifications, with clear board and shareholder approvals.

The Sills & Betteridge LLP corporate team have extensive proven experience helping business owners throughout Lincolnshire, Yorkshire and the East Midlands across all sectors achieve their exit objectives. If you are considering selling your business now or in the future, our corporate team can assist you every step of the way. We have the legal expertise, business skill sets and service delivery approach, to manage and co-ordinate the transaction smoothly and effectively and to get it completed on time, within budget and with least business disruption and minimum stress for you.

For an informal chat please contact Euan McLaughlin, Corporate Partner, on EMcLaughlin@sillslegal.co.uk or 01522 542211.