2 September 2025 · 6 min read · Bruce Thomas
Most owners think about exit roughly a year before they want to leave. The work that increases value and reduces tax needs to start two or three years earlier than that.
What buyers pay for
- Profit that continues without the owner present
- A diversified customer base rather than one dominant client
- Documented systems, contracts and processes
- A management team capable of running the business
- Clean, timely accounts and management information
- Recurring or contracted revenue rather than one-off work
Reduce owner dependency
If the business cannot operate for a month without you, it is a job rather than a saleable asset. Delegating customer relationships, technical knowledge and decision-making is the highest-value preparation available, and the slowest.
Tidy the balance sheet
Overdrawn director's loans, surplus cash, personal assets held in the company and unresolved disputes all complicate a sale. Dealing with them early is far cheaper than negotiating around them during due diligence.
Tax reliefs need advance conditions
Business Asset Disposal Relief has qualifying conditions relating to shareholding, voting rights and officer status over a minimum period before disposal. Business Property Relief for inheritance purposes has its own tests. Both need to be satisfied well in advance, not arranged at the point of sale.
Succession within the family
Passing a business to the next generation raises different questions — capability, fairness between siblings, funding the retiring owner's income, and inheritance planning. It also usually takes longer than a trade sale, and it works far better when discussed openly and early.
This article is general guidance for business owners in the UK and does not amount to advice for your particular circumstances. Tax rules change and the right answer depends on your figures — please take specific advice before acting.
