Selling your business: How to prepare for the exit

If you are an entrepreneur who has grown your company beyond its early days, you may eventually see retirement as an opportunity to sell and allow the business to thrive without you. Others choose to sell to pursue a new venture, or simply because the right opportunity presents itself. Whatever the motivation, it is important to recognise that there are several key factors to evaluate before completing a sale.

What Is the First Step in Preparing to Sell Your Business in the UK?

The first step in preparing to sell your business is creating a clear exit strategy. This involves valuing your business, reviewing financial and legal structures, and defining personal goals. Early planning helps maximise sale price, attract suitable buyers, and ensure a smooth UK business exit process.

Preparing for the Exit When Selling Your Business in the UK

“Before anything else, preparation is the key to success.”

Alexander Graham Bell knew that success begins with careful planning, and the same principle applies when preparing for a company sale. When selling your company and preparing for the exit in the UK, planning must start long before an offer is on the table. This means building relationships with advisers early and seeking the right legal advice on tax implications, potential buyers, and the best price achievable.

Building Early Relationships with Advisers

Rosie Bullard, Portfolio Manager and Partner at James Hambro and Partners, reminds us that a good relationship with advisers is key. “It's important for entrepreneurs to take time to meet a range of advisors and establish with whom they would like to work. The relationship and trust are essential.”

Why This Matters Early

Engaging advisers in advance helps you prepare for legal and tax issues, secure a strong sale agreement, and approach potential buyers with confidence ^[1].

Creating a Strategic Business Plan for Potential Buyers

Similar advice is shared by Stewart Sanderson, Senior Private Client Director & Head of UK Private Clients at Brooks Macdonald. “Invest in a (business) plan with both a short-term and a long-term strategy. This means looking at your current position and thinking about where you’d like to be in the future. But most importantly, ask yourself why you are exiting your company and build your plan after that. This is commonplace in your corporate planning but rarely prioritised for personal wealth.”

Strengthening Buyer Confidence

A clear business plan reassures potential buyers that the company can thrive under new management or a future new owner, while also positioning the company to achieve the best possible price.

Understanding the Business Valuation and Exit Process

Valuing Your Business

When preparing your exit process, one of the most important steps is knowing how to value your business before putting it up for sale. Professional valuations assess assets, earnings, and industry benchmarks to provide a realistic figure.

Planning Your Timeline

The exit process often takes months or even years, so starting early gives you the best chance of success and a smoother transition.

What Documents Do I Need When Preparing to Sell My Business?

When preparing to sell, ensure you have accurate and up-to-date financial statements, tax returns, legal contracts, and details of ownership or partnership agreements. Employment contracts, intellectual property documentation, and supplier or client agreements are also essential. Having these ready streamlines due diligence and builds buyer confidence.

It’s a Team Effort: Preparing for a Business Exit in the UK

Preparing for a business sale goes beyond reviewing the offer—it requires coordinated planning across legal, tax, and financial areas. “Taking that step requires a lot of previous preparation, and for that, there needs to be skilled legal, accounting and wealth management teams working with the individual beforehand,” Rosie reminds us^[2].

Are There Common Mistakes to Avoid When Selling a Business?

Common mistakes include undervaluing the company, rushing the process without adequate preparation, or failing to consider tax implications. Others neglect succession planning or overlook cultural fit with potential buyers. Working with experienced advisers reduces these risks and ensures you achieve the best long-term outcome.

Legal and Accounting Due Diligence

Ann-Marie Atkins, Managing Partner at Evelyn Partners, highlights that pre-sale preparation begins with legal and accounting due diligence, including negotiation and drafting legal documents. Both the business and the owner should be in a strong position to start discussions if the necessary pre-exit reviews, planning, and structure have been completed.

“Many entrepreneurs don’t start a business with the end in mind, so they might need to reconsider the way their company is structured and how they can extract some wealth for themselves,” warns Atkins. “Pre-exit you've got some opportunities to make decisions that you cannot do once you've entered a binding contract of sale. If you want to put assets into a discretionary trust or create a benefit for your employees, you need to prepare beforehand, and you need the right people to advise you on how to prepare and accommodate that.”

Key Steps in the Exit Process

Legal and Financial Foundations

• Carry out legal and accounting due diligence to ensure compliance and uncover risks.
• Extract surplus cash efficiently while considering tax implications.

Ensuring Continuity and Clarity

• Develop a business continuity plan to safeguard operations during the transition.
• Clarify ownership and shareholding structures to provide transparency for potential buyers.

Personal and Estate Planning

• Plan pre-sale cashflow and gifting strategies to maximise personal wealth outcomes.
• Review wills and power of attorney to protect long-term family interests.
• Create a financial and investment plan aligned with post-sale goals.

Building the Right Advisory Team

Preparing Two to Three Years in Advance

Experts stress that preparing two to three years ahead gives owners time to optimise tax structures, strengthen continuity plans, and demonstrate stability to potential buyers. This early planning creates flexibility and ensures the exit process is not rushed.

Upgrading Professional Support

Sanderson adds: “At one point there's going to be a transaction, so make sure long before that that the corporate structure is the right one from a tax perspective, and that the lawyers and the accountants have been upgraded. If you started this as a ‘mum and pop’ business or just an idea that has grown rapidly, the local solicitor may not be familiar with the advice needed for this type of business transaction. Therefore, it's critical to lay the foundations early on, ensuring the more efficient path taken, with a sensible structure created to deliver the best outcome.”

Choosing the Best Exit Strategy When Selling Your Business in the UK

Alongside protecting your team and finances, it is vital to decide which exit strategy best suits both you and the business’s future. The right choice balances personal goals with continuity, ensuring a smooth transition and the best long-term outcome. when preparing for an exit: how to prepare for the exit, thinking carefully about strategy is just as important as financial planning ^[3].

Common Exit Routes

External Exit

Selling to a trade buyer or private equity firm can provide immediate liquidity and, in many cases, the best price ^[4]. However, it usually involves giving up control quickly, so weighing both financial return and cultural fit is important.

Structured Exit

An employee ownership trust or management buyout provides continuity and rewards those who helped build the business. This often allows for a phased exit, giving the entrepreneur more influence over the handover.

Family Succession

Passing the business to the next generation secures your legacy but requires planning. Ownership transfers, tax implications, and governance must be considered to give the new management the best chance of success.

Planning for Life After the Sale

Business Continuity Planning

The best exit strategy should also reflect your vision beyond the sale. Atkins calls this “business continuity planning.” Entrepreneurs should decide whether they want to reinvest in ventures, act as an angel investor, stay involved as a consultant, or establish a charitable trust that combines philanthropy with long-term growth.

Maintaining Lifestyle

For many, the ultimate goal is financial independence. Creating a balanced investment portfolio ensures that sale proceeds support the same standard of living enjoyed pre-exit, while leaving room for future flexibility.

Considering All Possible Outcomes When Selling Your Business in the UK

Even with careful planning, a business exit may not unfold exactly as expected. That is why preparation must include contingency planning and trusted advisers. When selling your business: how to prepare for the exit, it is essential to think ahead, discuss potential scenarios, and make sure your strategy covers both financial and personal objectives.

Planning for Different Scenarios

Gareth Jenkins, Director at James Hambro and Partners, advises that “ideally entrepreneurs should come to see us long before the sale” so post-sale structuring can be optimised. Skilled legal advice and experienced tax advisers are critical in maximising outcomes and protecting wealth. He explains: “Most entrepreneurs will typically have two primary objectives post sale, firstly ensuring they have enough funds to meet their own expenditure for the rest of their lives, and secondly how to maximise the level of wealth that passes on to the next generation and intended beneficiaries. The weighting of these objectives will often change over time and is analysed as part of the review process.”

Cashflow Planning

Effective cashflow planning helps ensure personal needs are met and that wealth is structured efficiently for long-term security.

Inheritance Planning

Clarity around inheritance planning is equally important. Jenkins suggests preparing the next generation early by running smaller investment portfolios for children, giving them first-hand experience of how markets work and how wealth should be managed responsibly.

Taking Time with the Exit Process

“Education is key,” remarks Stewart Sanderson, who stresses patience when preparing for a business sale. His advice on how to prepare for exiting your business is clear: “Don't be afraid to take your time. There are important factors to consider, such as maximising your pension contributions, maximising any allowances for previously unused years. Now more than ever, pension planning is complex, if there’s family involved in the business there may also be broader allowances to consider, these things require time and analysis.”

Education and Pensions

Education applies not only to preparing family members for wealth but also to understanding the complexities of pensions and allowances.

Why Timing Matters

The exit process can take months or even years. Taking the time to address pensions, allowances, and succession planning ensures the best outcome for entrepreneurs and their families. Rushed exits often leave value on the table; thoughtful planning secures wealth and smooths the transition to new ownership.

Surrounding Yourself with the Right Support

Selling your business is not something to manage alone. Surrounding yourself with a strong management team of advisers provides clarity, protects wealth, and builds confidence in decision-making ^[5]. At Compare Wealth Managers, we offer an impartial route to finding a wealth manager for your needs. Our carefully selected partners, including private banks and leading wealth management firms, provide clients with access to the full spectrum of services needed for a successful exit.