Selling a business is often talked about in stages and numbers; valuations, offers. Heads of Terms. due diligence, and then the completion itself. But behind the figures, documents and detail is something just as important – the people who helped build the business in the first place.
For employees, finding out that the company they work for is being sold can create immediate uncertainty. Will I still have a job? Will my role change? Who will I report to? Will I have to work somewhere different? For the owner, those questions arrive during what is already one of the busiest and often most emotional periods in the life of a business.
Getting the people side of a sale right isn’t simply about keeping employees happy. Strong HR processes can give buyers greater confidence, help due diligence run more smoothly, protect productivity and reduce the risk of key employees leaving at exactly the wrong time.
To explore what business owners should be thinking about, Business Partnership had the pleasure of chatting with Fiona McKee, founder of The HR Practice, about the people side of selling a business. Fiona brings a wealth of HR and M&A experience, having previously worked as a Global HR Director. She founded The HR Practice five and a half years ago, initially specialising in merger and acquisition integration and helping businesses bring together their cultures, policies and processes following an acquisition.
When preparing a business for sale, there is plenty to think about before employees are even aware that a sale is being considered. Financial performance, customers and profitability will naturally be high on the list, but Fiona highlights another area that should not be overlooked; how well the people side of the business is managed.
From an HR perspective, getting the basics right can make a real difference when a buyer begins looking more closely at the business. Are employment contracts in place and up to date? Is the employee handbook accurate? Are HR processes documented? Is performance being managed effectively? These may feel like everyday operational details, but together they can give a buyer a much clearer picture of how well the business is run.
As Fiona explains, “If you’ve got robust processes in place… you’ll be a more attractive business to a buyer“.
When those foundations aren’t there, the opposite can happen. Fiona describes businesses without proper processes as sometimes feeling a little like the “Wild West” – which can leave a buyer wondering what else they might uncover.
That’s why Fiona recommends considering an HR audit ahead of a sale. It can identify gaps early, giving the owner time to address them before they become questions during due diligence. Missing contracts, outdated documentation or poorly established processes might feel relatively minor during the everyday running of a business, but they can take on much greater significance when a buyer and their advisers begin looking closely.
Unresolved employment risks could even result in a seller being asked to provide indemnities against issues arising in the future. Fiona’s point is that some of these problems are relatively straightforward to address when they’re identified early. After spending years building a valuable business, the last thing you want is for avoidable HR gaps to create uncertainty at the point you’re trying to sell it.
Good HR preparation isn’t just good housekeeping. It can help give a buyer confidence that they’re acquiring a well-managed business.
For many business owners, this can be one of the hardest parts of the sale.
There will often be stages where the transaction needs to remain confidential and only a small number of people can know what is happening. But once the time is right to tell employees, how the news is communicated matters just as much as when.
Fiona believes the current owner should play a visible role in that conversation. Employees know and trust the person who has led the business, so hearing directly from them can provide reassurance at a time of significant change. It’s important that employees understand the rationale for the sale. Why have you decided to sell? Why was this particular buyer chosen? What could the next chapter look like?
The acquiring business is likely to have similar values and culture and its scale could provide broader development and career opportunities for employees. Sharing this wider perspective can help employees understand the rationale behind the decision and reduce the likelihood of assumptions being made.
Communication should not end with the initial announcement either. Employees are likely to have questions and concerns as they process what the sale could mean for them. As Fiona explains, when there is a gap in communication, people naturally fill that gap themselves, often with rumours.
That is why clear, consistent communication throughout the transition is so important.
Once employees hear that the business is being sold, their first thoughts are likely to be personal…
“What does this mean for me?“
Will I still have a job? Will my role change? Will I have a new manager? Will I still work in the same location? If I work from home now, could that change?
These are the kinds of questions Fiona says business owners should try to think through before the announcement is made. The more clarity you can provide from the beginning, the less room there is for uncertainty to grow.
Where a new line manager is going to be introduced, they should also be prepared for that conversation. Having them visible and available to speak with employees can help begin building trust with the people they will be working with.
An independent HR consultant can be valuable here too. Employees may have concerns they do not feel comfortable raising directly with the current or new owner. Giving them the opportunity to have those conversations can help identify worries early and create a clearer picture of what support the team needs during the transition.
Ultimately, employees want to understand where they fit into the future of the business. The more answers you can give them, the easier it becomes for everyone to focus on what comes next.
In all businesses there are key people that need to be retained to ensure continued success. They might hold key customer relationships, have specialist knowledge, understand important processes or play a central role within the team. Keeping those people engaged throughout the transition is therefore key for both the seller and the buyer.
Retention bonuses or other incentives can sometimes be considered, but Fiona believes there is an important question to answer first…
“Who are the genuinely key people in the business?“
It is easy for an owner to assume they already know the answer, but Fiona explains that understanding the relationships and dynamics within the wider team can reveal a different picture. The people considered most senior are not always the people who will be most important to the business moving forward.
Any retention arrangements should therefore be carefully considered and focused on the people who genuinely matter to the future of the business. Keeping those employees informed, valued and engaged can help protect the knowledge and relationships a buyer is expecting to inherit.
Naturally, you want employees to feel reassured about the sale and what comes next. But Fiona warns against trying to make everything sound perfect, noting “Be positive about the future, but be realistic too”.
“Employees know the business and they know you. If the message suddenly feels overly polished or promises that everything will be wonderful, it can create more doubt rather than reassurance.”
Consistency is just as important. The message shared with the wider team should match the conversations happening individually. Telling employees one thing together and something completely different behind closed doors can quickly damage trust.
You do not need to have every answer. Be open about what you know, what you do not know yet and what employees can expect to hear more about as the integration progresses. Reassurance comes from honest communication, not unrealistic promises.
Depending on the structure of the sale, TUPE may also need to be considered. TUPE, or the Transfer of Undertakings (Protection of Employment) Regulations, is designed to protect employees when a business or part of a business transfers to a new employer.
For a seller, the important thing is to understand early on whether TUPE applies and what that means for your employees. Depending on the circumstances, there may be requirements around informing and consulting with the team.
Even changes that might seem relatively small can matter. Fiona gives the example of changing an employee’s pay date, which could require consultation as part of the process. You do not need to become an employment law expert just because you are selling your business. What matters is getting the right HR and legal advice early enough to understand your responsibilities and plan for them properly.
The earlier you know what is required, the easier it is to make it part of the sale process rather than dealing with it at the last minute.
After months of preparing, negotiating and working towards completion, it can be tempting to feel like your part is finished once the deal is agreed. But for your employees, this may be when they need you most.
When asked for the single biggest piece of advice she would give a business owner going through a sale, Fiona’s answer was simple…
“Be present”
Be visible, listen to concerns and give people the opportunity to ask questions. Fiona also recommends working with an HR consultant who can provide additional support and give employees another person to speak to throughout the transition.
It is also important to work with the new owner rather than against them. You chose that buyer for a reason, so helping them build relationships with the team can make the transition smoother for everyone.
Selling your business might mark the end of your chapter as the owner, but for your employees, it is the beginning of a new one. How you support them through that change can make a lasting difference.
A successful business sale is about more than reaching the right valuation and finding the right buyer.
The people within the business can be a huge part of what makes it valuable. Their knowledge, experience, customer relationships and understanding of how the business operates do not simply disappear when ownership changes. Thinking about HR early can help identify potential issues before due diligence, give a buyer greater confidence and make the eventual transition easier for the people involved.
Then, when the time comes to communicate the sale, being visible, consistent and open with employees can help protect the team and the business you have spent years building. For Fiona, the people side of a sale should not be an afterthought. It should be considered alongside every other part of preparing a business for its next chapter.
At Business Partnership, we help business owners prepare for sale and navigate the process from the early stages through to completion. Working alongside specialists such as Fiona McKee at The HR Practice can also help ensure the people side of that journey receives the attention it deserves.
Get in touch and we’ll talk it through.
Our thanks to Fiona McKee for sharing her time and experience for this insight.
Fiona is the founder of The HR Practice, a Glasgow-based HR consultancy working with SMEs and entrepreneurial businesses across Scotland and the UK. A Chartered Member of the CIPD and formerly Global HR Director for a multinational services and technology business, Fiona set up The HR Practice with a particular focus on mergers and acquisitions, helping businesses bring together cultures, policies and processes following a deal.
The HR Practice provides retained and project-based HR support, including HR audits, employment contracts and handbooks, performance and absence management, restructures and TUPE, and M&A integration. If you’re preparing your business for sale and want to make sure the people side is in good order, you can find out more at thehrpractice.co.uk.
The views expressed are Fiona’s own and are provided for general guidance. Business owners should take specific HR and legal advice on their own circumstances.
Chancellor John Healey has confirmed the Autumn Budget will land on Wednesday 28 October 2026. For business owners who are weighing up a sale in the next year or two, it’s a date worth watching closely, as tax on business disposals has moved twice in the last eighteen months already, and the rumour mill suggests it isn’t finished.
Below is where things stand: the political backdrop, what’s actually being speculated about, and, because it’s one of the questions we get asked most, the full history of Business Asset Disposal Relief and what might happen to it next. As ever with Budget speculation, none of this is confirmed until the Chancellor sits down on the day, so treat it as context for planning conversations, not as advice to act on.
This will be the first Budget delivered under Prime Minister Andy Burnham, with John Healey as his Chancellor. New leadership usually means a genuine reset in direction, and Burnham has been open about his own view that the UK “taxes work more heavily than wealth” – a philosophy that puts capital gains, dividends, and wealth-related taxes squarely in the spotlight rather than income tax or VAT.
The fiscal backdrop hasn’t got any easier. Estimates of the gap the Chancellor needs to close range up into the low twenty-billions, driven by higher borrowing costs and existing spending commitments. Labour’s manifesto pledge not to raise income tax, employee National Insurance or VAT still stands, which narrows the options. And historically, when those three levers are off the table, capital gains tax, dividends, pensions and property are where governments look instead.
A few themes keep coming up across the tax and advisory commentary:
BADR is the relief that matters most directly to anyone selling a trading business, so it’s worth setting out the full history before looking at what might come next.
We’re not fans of Budget speculation, and we like it even less when it tips into scaremongering; a nervous owner is not a well-served owner. But BADR has a habit of changing with almost no notice, and changes tend to bite from the very next tax year. So, while we’re hoping for the best, we’d rather our clients were prepared for the worst.
So in less than two years, the effective tax rate on a qualifying business sale under BADR has gone up by 80% (from 10% to 18%), even though the £1 million lifetime limit hasn’t moved.
Last November’s Budget left BADR itself untouched, but did cut the CGT relief available on sales to Employee Ownership Trusts from 100% to 50% of the gain, closing off one of the routes some owners had been using as an alternative.
Nobody is currently pointing to a specific confirmed change to BADR for this Budget, but the loudest speculation right now is about the main rate of CGT, not the relief itself. But the two are connected.
If ministers do move to align the headline CGT rate more closely with income tax, BADR’s 18% rate and its £1 million cap become the main thing standing between a business owner and a much larger tax bill on sale. That makes BADR a natural place to look if the government wants to claw back some of the revenue it would otherwise lose by protecting entrepreneurs, and it’s exactly the kind of relief that’s been narrowed twice already in the last six years.
Budget speculation is exactly that, speculation, and we’d never advise anyone to rush a sale purely on the back of a rumour. Deals done for the wrong reasons, at the wrong pace, tend to be the ones people regret.
But the pattern over the last two years is BADR has moved twice, always upward, always announced in the Budget and effective from the following April. If a sale is realistically on your horizon in the next twelve to eighteen months, it’s worth having the conversation now about timing, valuation and readiness, so you’re in a position to act on facts once the Chancellor actually stands up on 28 October, rather than reacting after the event.
If you’re already in process with heads of terms signed and working through due diligence, it’s less about speculation and more about momentum. Push to get to completion ahead of the Budget where that’s realistically achievable, make sure everyone at the table (you, the buyer, both sets of lawyers and accountants) is aligned on timeline and pulling in the same direction, and keep due diligence moving as efficiently as possible rather than letting it drift.
None of that means cutting corners; a rushed deal that unravels post-completion is worse than a clean one that lands in November. But a deal that’s ready to complete shouldn’t be left to run past a Budget it didn’t need to.
We’re not tax advisers, and nothing here should be treated as tax or financial advice – please speak to your accountant or tax adviser about your own position.
What we can help with is the practical side; an honest view of what your business is worth today, what buyers are active in your sector, and what a realistic timeline looks like if you decide the time is right.
Get in touch and we’ll talk it through.
The political commentary in this article is used for illustrative purposes only and does not reflect any political affiliation or endorsement on the part of Business Partnership. This insight is intended as general information, not formal advice. Every business and exit is different, so please seek tailored professional guidance before making any decisions.
Your exit plan is in place, business valuation is complete, marketing materials prepared, and your sale listing has been published. So why has there been so little interest in your business from potential buyers? Engagement on your listing is low, even though it’s been on the open market for weeks. You imagined people would be clamouring to buy your business. Could your asking price be scaring buyers away?
When buyers perceive your asking price to be unrealistic, it puts them off making contact. Price your business too high, and it could be judged as expensive and unattainable, too low, and it might set off warning bells or come across as desperate, leading to cheeky offers.
In this blog, we consider the factors involved in setting a business asking price on the open market, assess the pros and cons of different pricing options, plus the benefits of obtaining a professional business valuation.
Looking for a business valuation? Find out what your business is worth.
Perception plays a critical role in business value, and can be influenced by sector, size, audience and budget. For example, a buyer who is looking to purchase in a specific sector may perceive businesses in that sector to be worth more due to the potential value they represent to them.
Then there is the psychology of numbers. In the UK, we’re used to seeing goods priced at 99p because this price feels more manageable than £1. These days thanks to inflation, you’d be lucky to find anything in a shop at that price! The same rule of perception applies to business sales. Often, a business valued at £149k will be perceived as being more attractive than one priced at £150k.
A business priced at £150k may also tip into a higher pricing bracket in online searches, which can result in fewer clicks. Your pricing strategy should take into account your target audience as well as perceptions of price, so you don’t miss out on visibility.
Take a look at our current businesses for sale.
When our brokers support vendors to value and market their businesses, there are three common pricing strategies available:
Let’s look at the advantages and disadvantages of each.
Vendors that choose to be upfront about their asking price generally want to deter unrealistic buyers, and attract more genuine ones. In some circumstances, such as a quick or forced sale, being transparent about expectations of value can work in favour of the buyer. Selling due to retirement may also require you to be upfront in order to generate sufficient funds for the lifestyle you desire.
Most small business sales (sub £100k) tend to be listed with a clear asking price. Buyers at this level are likely to be working to a tight budget and prefer to filter online listings by price. In sectors in which value is based on common factors, such as IT services, asking price is almost always published.
A guide price will still attract genuine, interested buyers and may create healthy competition. Asking for offers around a specific figure could trigger offers over and above the guide price to secure the sale, however it may also lead to offers below the guide price.
Inviting buyers to make an offer demonstrates flexibility and a willingness to negotiate. It generates intrigue and interest, leading to competition and potentially increasing the value of bids. On the flip side, it could also deter serious buyers from making an enquiry. Some buyers will discount opportunities with no indicator of whether they can afford to buy.
Most businesses valued at over £500k tend to invite offers. These are more likely to be a B2B purchase and offers are based on perceived value, e.g. potential savings and profit. Equally, if your business does something remarkable, setting an asking price can make it appear expensive, so we would recommend inviting offers instead. Unique businesses shouldn’t have to justify an asking price in online listings. Those reasons should be discussed with genuine buyers during the negotiation process.
There are several factors that influence a vendor’s decision not to list a selling price:
Setting an asking price when selling your business may help avoid time-wasters and attract more realistic offers in line with expectations. Clear pricing could also make your business stand out and garner attention in online searches.
While some buyers are motivated by price and need to see this upfront, others are looking for different forms of value and are willing to make an offer. Profiling your ideal buyer can help you to decide whether to list an asking price. Going through this exercise with clients as we support their exit often enables us to target a shortlist of ideal buyers privately before moving to the open market.
Ultimately, it comes down to personal preference and gut feel. Is your ideal buyer’s decision to purchase driven by price, or are they willing to research and spend time exploring the opportunity?
Valuing a business is only straightforward in a handful of sectors, making it difficult for a business owner to determine a realistic sale price. Business valuations are based on several factors and methods, so it’s important to select the right approach. At Business Partnership, our brokers combine their individual knowledge with partner expertise to support vendors and buyers through the sale process. Obtaining a professional business valuation generates an achievable sale price, based on recent selling prices and an understanding of the current business sales market. We have brokers experienced in selling businesses in your sector and location. Find your local partner here and get in touch to find out how they can help
In the UK, July and August are traditionally slow months. Except for of the leisure and hospitality industry where the summer months are one of the busiest times of year, during school holidays colleagues are away, workloads become lighter, and the general pace of life calms down. When you have accepted an offer to sell your business, taking your foot off the gas is the last thing you want to do – at any time of year. Buyers and sellers alike would much prefer to keep the momentum going. Switching off is not an option.
Watching a business sale or purchase flatline can be frustrating, especially if you are working towards a personal deadline, e.g. retirement or a planned holiday. There may also be professional or commercial reasons why you would like the sale to continue apace, such as the need to relocate, expand, or attract new financial investment.
In this blog, we are going to explain some common reasons why a business sale may stall, and how appointing a business broker can help mitigate the risks.
There are many reasons why a business sale might slow down or stall. Issues may come to light through due diligence, external funding could fall through, and economic conditions can change causing financial uncertainty. For this post we will examine things from the human perspective. Let’s look at the people-related reasons why the sale of a business might lose momentum.
Where there is more than one director involved in running a business, each usually has an equal say in making decisions. This means when a director or managing partner goes on extended leave, important sale-related decisions cannot be made and progress may stall until they can be consulted.
While you cannot predict outcomes for every scenario, you can plan for this kind of situation before key decision makers take leave. Either agree on important decisions beforehand or empower the remaining director/s present to make decisions on behalf of the board. A business broker can add value by posing hypothetical ‘what if’ scenarios and recording the responses to inform future decisions.
Every professional has a lot on their plate. While your business sale might be your top priority, solicitors, accountants and other advisers all have their own agendas. Keeping everyone on track takes skill, sensitivity and experience.
When the professionals involved in a business sale revert to ‘go-slow’ mode, having a business broker on your side can be a godsend. Part of a broker’s role is to liaise with all parties and keep everyone on track to achieving the end goal. They will do all the legwork, enquiring about progress, prompting for responses, and maintaining the momentum, so every task is completed. Imagine how reassuring it would feel going away on holiday knowing that your business sale is in such safe hands.
Sadly, life throws a curveball every now and again, and business partners and decision makers sometimes get sick. You cannot plan for unexpected illness, but you can put the right structures in place to limit the impact of sickness on your business sale. Having up to date documentation, such as Shareholder Agreements and Articles of Association, should enable the remaining directors to make decisions in another director’s absence. In the most difficult circumstances, illness may dictate the need to speed up the sale process, in which case having a broker who is not emotionally involved, can be invaluable.
When key players in a business sale don’t see eye-to-eye, the sale process can lose momentum and trust between parties starts to erode. Arguments can easily arise over finance, e.g. who will pay for a survey to be carried out, or where one party feels the other is withholding important information. It’s not uncommon for larger boards of directors to disagree so much, they are unable to reach a consensus. When this happens, a business broker can step in to smooth the waters and calmly mediate matters to help everyone come to an agreement.
Similar to illness, big life events on both sides of the deal naturally divert people’s focus and attention, which may slow down business sale progress. Births, deaths and divorce have all been known to put the dampers on business sales. Our local business brokers have experienced every kind of life event and their impact on business sales, from a two-week delay for paternity leave, to the untimely death of a director jeopardising the sale. Without a business broker to advise and guide you, it can be difficult to know how, or even whether, to proceed in such circumstances.
At Business Partnership our business brokers are independent and impartial. We look after the interests of the buyer or seller who has appointed us and immerse ourselves in all aspects of the sale, keeping track of every tiny detail. Having access to this level of information helps maintain momentum whilst key people are on leave or unable to engage in negotiations and decision-making.
If we have clear instructions and are authorised to do so, we may act on behalf of our client, taking decisions whilst you take that family holiday or focus on maintaining business as usual. This means you can take the break you deserve and still be confident that your business sale is progressing in the background.
If you don’t want to see your business sale or purchase grind to an unexpected halt, appointing a business broker could be the right decision. Our fixed fee package offers peace of mind and reassurance that tackling any of the issues discussed in this blog is included in our service. Book a complimentary call with your local broker to talk through the process of selling or ask for help and advice if your business sale has lost its way.
It is imperative that you know, like and trust your broker, so you can work together to get your business sale or purchase over the line and in line with your objectives. Contact your nearest office and start the conversation today.
At Business Partnership we’ve entered the final stages of a 12-month rebranding project. It has been a huge endeavour with input from all our Partners, and includes implementation of a new CRM system that integrates with our website. The upgrade will improve the quality of data gathering and analytics to give us more information and create efficiencies to help us better serve our clients. We also realise updating our brand will add value in other ways.
The reason we embarked on the project was our brand was in need of a refresh. When business branding appears dated, it can come across to an outsider as being lax and stuck in its ways, while a fresh new look can enhance people’s perceptions, moving it from irrelevant to current. From a business broker perspective, we know for a fact that updating your branding can add significant value to the sale price of a business.
Building a trustworthy, reputable brand could be invaluable should you decide to sell your business. In this post we explain how branding contributes to business value, how much a strong brand could be worth in financial terms, and share some key points to consider when tackling a rebranding project, based on our own experiences.
Positive brand perception is a valuable business asset. Creating an emotional and personal connection with your brand inspires trust, loyalty and repeat purchasing decisions. A consistent brand experience throughout every stage of the customer journey is something every business should strive to achieve. Here’s why…
A strong business brand:
When valuing a business, your brand counts as an intangible business asset, similar to things like trademarks, intellectual property, and strength of client/supplier relationships. According to Forbes, brand contributes between 5% and 13% of overall market value, and if you have a strong brand this equates to anywhere from 9-28% higher revenue growth. Above all, your brand reflects your reputation and the quality of connection with your customers. A robust, up-to-date brand can be highly attractive to potential buyers.
When you look at the value of global brands such as Nike, Coca-Cola and Apple, it’s quite easy to understand the value a strong brand adds to a business. Take Apple for instance, millions of people across the world trust the Apple brand to keep them connected. Many choose Apple devices for their quality, reliability and durability. The company’s vast technical knowledge and investment into research and development are also held in high esteem. For these reasons people don’t think twice about sharing their most personal data with the company.
The inherent strength of the Apple brand has created one of the world’s most loyal customer followings. Fans are willing to pay over the odds to own the latest version of phone, watch or computer with its technical wizardry and wonder.
Brand reputation is more than updating a logo, it is built over time. This is why switched-on business owners look to invest in brand development long before they decide to sell. Our advice is to take a long-term view and weigh up the potential returns on investment. What are the costs and benefits of refreshing your brand now versus leaving the job for a new business owner? For more advice on this subject, talk to your local business broker. You may also find these tips for selling a business in 2025 helpful.
Rebranding is no quick fix. You can’t push a button to make everything change (believe us, we know!). While it’s drummed into us to have a consistent brand and messaging across all our marketing, individual channels are rarely connected. For example, your website is a separate entity to social media platforms, and every item requires a different file type, format, or size of logo. Here are some other helpful points to consider:
By investing in your brand you are taking positive steps to grow your customer base, increase revenue, and create a loyal following that could become a valuable business asset. Whether to invest prior to selling is a conundrum best talked through with a business broker. With expert industry knowledge and free valuations, you can trust us to put the interests of you and your business first. Find your local Business Partnership broker here.
“I’ve agreed a selling price for my business. What happens next?”
It takes a lot of behind-the-scenes effort and expertise to value and bring a business to market. You’ve already been through this and the negotiation phase, having found a buyer with genuine interest and agreed on a price. Once you reach this stage, you might feel relieved the sale is almost over, however that’s when the real skilled work begins.
The weeks and months following an agreement to sell your business can be demanding and stressful. In this blog, we’ll explain the three key stages that take place following agreement of a business sale price, touching on due diligence, Heads of Terms, contracts, and solicitor involvement.
The process of buying and selling a business is complex. It can be difficult to know where to start. Our clients tell us that having a business broker by your side is a huge support and helps you achieve your desired outcome. Here’s how we can help.
When a buyer agrees to purchase a business, they will instruct their legal representatives and business analysts to investigate every last detail of the sale. And rightly so. Paid professionals have a duty of care to ensure buying the business is a good decision. They want to achieve the best deal structure and get value for money for their client. For the business owner this brings a level of intensity and scrutiny they may never have experienced, especially if the sale involves significant assets, business premises and staff.
Once a verbal agreement has been reached, the first step is to draw up the Heads of Terms (HoT) agreement. This sets out the terms of agreement between all parties involved in the sale of the business. Usually drawn up by the vendor’s business broker, it is signed by buyer/s and vendor/s, it is then sent to both solicitors so they understand the early details of what has been agreed in the sale. The Heads of Terms may also be copied to both accountants and the landlord (if property is being included in the deal). It is an offer in principle but subject to the due diligence process.
While the finer details of the sale may evolve as due diligence is carried out and completed, the Heads of Terms will remain a valuable summary of commitment and should be used as a tool to guide necessary re-negotiations that due diligence may expose, as well as creation of the final contract agreement.
A Memo of Sale is a reference document which outlines the names and contact details of everyone involved in the sale and purchase of the business. Created at the same time as the HoT, it would usually include the buyer, vendor, accountants, solicitors, landlord, and business broker/s. The Memo of Sale is then circulated to all parties to facilitate good communication throughout the sale.
NB. If you’re reading this in the USA, you may know the Memo of Sale as a document linked to the sales particulars and marketing of a business.
At this point, whether to take your business off the market is your choice. Some vendors prefer to keep it on the open market until the final contract has been signed. Sometimes removing it from the open market is one of the terms stipulated by the buyer.
The third step is to draw up a contract of sale (often referred to as the Sale and Purchase Agreement or SPA for short), which triggers the start of the due diligence process. In a Goodwill & Assets Sale, this is usually done by the vendor’s solicitor. In a Share Sale, this is usually done by the buyer’s solicitor. The buyer and their team will require access to key financial, legal, operational, customer and employee information, which they will scrutinise to build a complete picture of business health and value.
Due diligence can sometimes feel like a game of ping-pong, batting requests and responses between you until all parties are happy and the original offer in principle has been confirmed. Having a broker by your side during this phase can be a huge support, releasing you to maintain business as usual whilst your broker assists with information requests.
In our experience, solicitors and legal advisers will always be cautious in the advice they offer, whereas a broker is much more down-to-earth and realistic. After all, they are drawing on years of commercial experience buying and selling businesses. So, when that 10-year non-compete clause lands in your inbox, your broker is there to negotiate it down on your behalf, without exposing either side to undue risk.
Further guidance on what due diligence you should do when buying a business.
Even after the final contract agreement has been signed, there is no time to sit back and relax. There are actions that need to be planned and aligned to complete at the same time, from the bank releasing funds to the handover of systems and business premises. It’s crucial to never lose sight of the last pieces of the jigsaw if you want the sale to complete within the agreed timescale.
External factors can also affect the timing of a sale, for example legislation. Changes to Capital Gains Tax bands in 2024 impacted several business sales we supported. Meticulous planning from our business brokers enabled sales to reach completion in advance of the deadline.
A reliable Business Broker is the vendor and buyer’s voice of reason before, during and after a sale price has been agreed in principle. Find your local broker here. We can work with you before you put your business on the market and act on your behalf to guide and oversee business sale proceedings through to completion, getting the best possible deal for our client. Appointing a business broker is easy and can put you in a position of advantage. Get in touch to find out what your business is worth in today’s marketplace.
As we enter a new tax year, financial uncertainty is a hot topic of discussion between our business brokers and their clients. The question we’re being asked most is ‘What impact will the UK National Living Wage and Employer’s National Insurance increases have on the sale value of my business?’.
The uncertainty created by economic and political factors is a genuine and valid concern for owners selling their business. External influences can affect market conditions and reduce buyer confidence. Look at what’s happened to share prices in the aftermath of the Trump Tariff announcement. The global markets are reeling. The result of uncertainty in financial markets is a more cautious and demanding buyer.
In this blog we share the steps to take to plan for the impact of financial change and uncertainty on your business sale, how to calculate the potential impact and present this information to maintain buyer confidence.
Every business experiences expected and unexpected challenges in its lifetime. Losing your biggest customer or a major new competitor in the market would be unexpected. The planned increase in National Living Wage or tax is not. The latter is a significant change for businesses which employ staff. However, you can forecast and plan for some financial changes to prevent them devaluing your business.
Of course, external factors can influence business value positively and negatively. Valuations are made at a specific point in time. No business valuation is set in stone and most are open to negotiation. So while we are focusing on the consequences of rising costs in this post, financial uncertainty can have positive impacts too.
A business broker will do their utmost to foresee challenges and guide you to prepare for the sale process, but not every challenge can be anticipated. Staying on top of your numbers and keeping your financial forecasts up to date will help you to navigate change. Thorough, accurate and detailed forecasting is essential.
For a current market business valuation, contact your local business broker.
Since the changes were announced in November 2024, we’ve been advising vendors to recalculate their financial forecasts based on the new National Living Wage and Employer’s National Insurance rates effective from April 2025.
Buyers are asking for an outline of how a business will cover these rising costs. Will you pass the increase on to customers, plan to curb recruitment, make redundancies, or can you cover it from profits?
Accurate and detailed financial forecasting is crucial when selling a business as a buyer wants to know the business they are investing in is on a sound footing – now and in the future. Building an honest picture of where your business will stand financially at the end of this year, next year, and beyond builds buyer confidence. It shows you are on top of your numbers and have considered different external scenarios and their possible impacts.
Buyers will analyse your forecasting to understand the risks the business will face and for future growth, business planning, budgeting and recruitment. They need those figures to make a considered valuation, and if they decide it’s a good investment decision, anticipate any tough choices that lie ahead.
Vendors should consider these four themes when preparing and presenting financial forecasts to prospective buyers.
The way you present your business for sale is important. Every business vendor must make sure their financial forecasts are fit for purpose. You cannot prepare the forecasts prior to listing your business on the market and then forget about them. As economic conditions change, you should be reviewing and refreshing your financial forecasts to show potential buyers exactly how you stack up against the competition. It’s part of risk management and protecting your business during the sales process. In fact, the future of your business, and your own future plans, depend on it.
If financial forecasting and modelling is not your strong suit, your local Business Partnership broker can advise on the kind of financial documentation a buyer will expect to see. Find your local expert here. We help our clients handle every aspect of their sale or purchase, from valuation and finding your ideal buyer to supporting the sales process through to completion.
You’re a confident, successful entrepreneur, a skilled negotiator, and nobody knows your business like you do. When the time is right to sell your business you intend to be heavily involved in the selling process. The big question is do you enlist the services of a business broker or decide to approach buyers directly?
There are many reasons why an owner might think they are best placed to sell their business. In fact we hear this one fairly often. You might be put off by a broker’s fees, not being in complete control of the sale process, or fearful that confidential information might leak out to the press, employees or customers. You may believe that selling a small business will be a fairly easy task, especially if you already have a buyer in mind, e.g. a supplier or competitor, but years of managing a business can’t prepare you for the complexities of a company sale.
These are all valid reasons, but in choosing to go it alone you are leaving yourself open to certain risks. In this post we’ll discuss the risks of selling your business without an agent and how the support of a business broker can guide you through them.
Business sales are rarely straightforward. Most involve solicitors, accountants and surveyors as standard, while others require input from landlords, local authorities and other subject matter experts. Then there’s the legal jargon and where to start with due diligence. Part of a broker’s job is to explain what is likely to happen at each stage of the sale process and explain the terminology involved, so the vendor feels confident throughout.
It’s very common for there to be a mismatch between vendor and buyer valuations, which can hinder progress. A broker has the skills to smooth and mediate this process, helping each party to understand the true value in the business. If one party won’t budge on their valuation, a broker may be able to negotiate deal terms that are acceptable to both sides.
Ready to get a realistic valuation of your business? Get in touch here.
If a business sale is straightforward it could go through in a matter of weeks, however some business sales take years to complete. Finding the right buyer, negotiating terms, complex due diligence, a buyer pulling out – do you have the energy and motivation to navigate these hurdles over an extended period of time?
Vendors are often surprised how lengthy and complex the process is and how much it takes out of you. Selling a business is a full-time job and it’s nigh on impossible to manage a growing business at the same time.
Every business sale presents unexpected challenges. A surprise reduced offer, legal loopholes, tiny details and buyer demands you didn’t account for. A broker uses their intuition and experience of selling businesses to identify potential pitfalls and challenges before they become problems. They can filter out buyers who aren’t genuine and manage negotiations with serial investors. If you went into negotiations with a professional investor who has purchased multiple businesses on your own, how do you think you would fair?
We’re all familiar with Rightmove, Zoopla and Purple Bricks. When it comes to selling your home these are trusted household names. But would you know how to write the sales particulars for a business for sale or how to write and post an ad to find your ideal buyer? A broker has access to networks allowing vendors to reach people who are already interested in acquiring businesses. This can create competition between interested buyers, potentially leading to higher offers.
Find your local Business Partnership office to connect with a broker who is experienced in your sector.
What will you say when you meet an interested buyer for the first time? Will you be able to leave your emotions and personal connection to your business behind. A broker will plan the conversation carefully to present you and your business in the best possible light. They may structure the conversation so that you’re not involved in the more emotive parts, maintaining professionalism, objectivity and neutrality at all times.
If you want to, you can sell your business without using the services of an agent or broker. Selling direct may save on fees, but the cost of the additional risks you take may outweigh those savings.
A trusted, reliable broker who has experience of business sales in your sector is worth their weight in gold. Acting as an intermediary they will protect your personal and business interests, find your ideal buyer, and showcase your company in the best light. As they guide you through the sale process, their skills in valuation, negotiation, problem solving and managing buyer expectations will show their worth. In choosing not to use a business broker to sell your business, you could miss a minor detail that turns out to be critical to the deal and impact your future plans. Is this a risk you are willing to take?
To avoid unnecessary risk when selling your business, talk to Business Partnership today. Your business broker will guide and support you every step of the way from initial valuation right through to signing on the dotted line.
Deciding to sell your business is a big decision, both in terms of being mentally ready to move on to pastures new, and making sure you get the right deal for you. Years of hard work and dedication come down to this. This guide will look at some of the factors you need to consider, how to navigate the complexities of the sale process, and how you can make sure you do avoid the common pitfalls sellers can fall foul of.
Here’s how you can give yourself the best chance of achieving a smooth and successful transaction.
One of the biggest mistakes business owners make is not preparing adequately for the sale. This involves more than just deciding to sell; it requires detailed planning and organisation. Begin by ensuring your financial records are in order and up to date. Prospective buyers will scrutinise your financial health, and any discrepancies can derail the sale.
Additionally, gather all relevant documents, including contracts, leases, intellectual property records and statutory compliance records. Also question whether preparation needs to extend to your team as well – consider when the best time is to inform them that you’re selling and which team members need to know at which time. It’s vital to maintain operational stability, but there will likely be certain people who need to be involved to help you prepare from an early stage depending on the size of your business.
Overestimating the value of your business is a common pitfall that can lead to prolonged sale processes and frustration. It’s crucial to have a realistic valuation.
Get a free valuation today here from us.
We can help you assess various factors, including market conditions, financial performance, and growth potential. Securing the right deal is difficult, and it all starts by making sure that the asking price is right.
The sale process can be lengthy and demanding, often taking several months to find a buyer. During this period, it’s vital to continue running your business as usual. Neglecting day-to-day operations can lead to a decline in performance, which won’t help you attract potential buyers. Additionally, even after a potential offer for your business is accepted, it’s crucial to maintain focus and keep driving the business forward until the transaction has completed.
Have a think to see if you can delegate any tasks to colleagues whilst you focus on preparing the business for sale and the sale process.
Not all interested parties are suitable buyers. It’s essential to qualify potential buyers to ensure they have the financial capability and genuine interest in acquiring your business. Qualifying potential buyers saves time and money whilst making sure that you can give sufficient attention to the right potential buyers.
You can vet interested parties by requesting proof of funds and holding preliminary discussions to assess their seriousness and capabilities. You need to try and avoid any potential deal falling through down the line, especially if it’s taken months of work to get to that point. Vet potential buyers as early as possible.
Maintaining confidentiality throughout the sale process is crucial. Premature disclosure of your intention to sell can unsettle employees, suppliers, and customers, potentially harming your business. Again this comes back to taking the time to consider when the right time is to advise specific employees, as well as relevant stakeholders – which could be waiting until after the sale in some circumstances.
Negotiation is a critical component of the sale process, alongside making sure you’re actually negotiating with the right buyer in the first place.
It pays to get a professional in your corner as soon as possible to deal with both of these aspects – the search for your ideal buyer and the negotiation. Not to mention the rest of the complexities of the sale process.
Sell your business with Business Partnership.
At Business Partnership we can provide you with a free valuation today.
There’s never any obligation and it’s always confidential. Find out what we could achieve for you and how we can help you every step of the way.
Call our team on 01606 535 024 or find your local contact here.
Selling your business is a significant milestone. It’s something to celebrate but also something that can be incredibly nerve-wracking – especially if it’s your main nest egg. The key is to prepare as thoroughly as you can before you start negotiations with potential buyers. Then you will be ready to navigate the negotiation process and realise the best possible sale price.
Negotiating the sale price of your business is a journey in itself, but with the right approach, you can maximise your returns and walk away feeling satisfied with the deal and ready for the next chapter of your life.
Here are the key elements that will lead you to success when negotiating your business’ sale price.
Before you start any negotiation, you need to know 2 things:
What you need to sell. See it as a minimum target too set for your sale. The ideal person to do this is a wealth manager.
The value of your business. Understand what a fair price for your business is. This involves conducting a thorough valuation.
You should consider factors such as revenue, assets, intellectual property, market position, and future growth potential. Consulting with an expert at this point usually comes with no obligation and could make a huge difference to what you’re ultimately able to achieve for your company. If you were previously undervaluing your business in your mind this could make you a lot of money. Equally, if you perceived your business was worth more, an accurate valuation will be the catalyst to help you recognise what you need to change to help you get to the valuation that you want. Our Value Builder tool is an ideal place to start.
Once you know your business is worth more than you need you are ready to sell and as knowledge is always power you strengthen your hand by knowing where you need to be when negotiating.
While aiming for the highest possible price is natural, it’s essential to be realistic and flexible to facilitate productive discussions.
Different buyers will have different views on the value of your business to them. Others will have the ability to pay more up front. What we are not saying is to accept a low cash offer, over a higher one paid over time, but opening any negotiation with flexibility helps discussions to progress, you can then decide whether to pursue the offer that results or not.
Also consider factors such as market conditions, industry trends, and the buyer’s financial capabilities and why they NEED to buy you when setting your shortlist of suitors.
Once you get to the negotiation table it’s vital to have a clear understanding about the unique strengths your business has to offer to a buyer (and they may differ between buyers) and sell your value proposition. Think of it as a “Why you list”. Whether that’s a loyal customer base, innovative products or services, proprietary technology, or strong brand reputation, highlighting these assets can serve to justify a higher sale price.
Put yourself in a potential buyer’s shoes ahead of time to anticipate any potential concerns and consider their objectives. Understanding this will give you the insight you need to tailor your negotiation strategy to your benefit, the buyer’s benefit, and for the benefit of the whole deal. Mitigating potential risk matters as much as highlighting potential.
It goes without saying that you want to leverage your strengths and competitive advantages during negotiations to bolster your position, and it’s important to keep this front of mind at all times. Your buyer will want to focus on the issues and you will want to always be on a positive footing rather than defending your position. So acknowledge and allay their concerns, but do not be afraid to blow the trumpet!
Whether it’s multiple interested buyers, a unique market niche, or strong financial performance etc., consistently emphasising your strengths and your position can secure you a better deal.
There’s always going to be most emphasis on the core elements of the deal — the price and the terms, but it’s a good idea to be open-minded and willing to explore creative solutions that benefit both parties. Especially if negotiations stall for whatever reason.
This could include seller financing, considerations around future performance, or structuring the deal in a different way — perhaps for taxation reasons.
NB – Whenever vendor financing is offered, always ask if they have a track record of successful deals and if they will provide a reference – after all they want to borrow your money.
Approaching negotiations like this could help you salvage a deal or get an improved offer.
Negotiating the sale price of your business is a complex process that requires expertise and experience. Get the advice and support that you need — it will pay for itself many times over. And without it, it will likely be difficult to secure a sale at all. Find a partner that can help you.
Negotiations can be prolonged and challenging so mentally things can get quite difficult. It’s important to keep the end in mind and keep going. Ensure you have a trusted and experienced sounding board. Don’t lessen your goal without good reason. Stay the course.
Avoid rushing into hasty decisions or compromising your position out of desperation. Stay focused and maintain open communication with the buyer. Trust and put up with the process to achieve the best possible result.
At Business Partnership we can provide you with a free valuation today.
There’s never any obligation and it’s always confidential. Find out what we could achieve for you and how we can help you every step of the way.
Call our team on 01606 535 024 or find your local contact here.
Whether you’re selling, buying, or planning for the future, Business Partnership is here to help. Contact us today to speak with your local Regional Partner and start your journey toward success.