How Do You Sell a Business? A Step-by-Step Guide for Business Owners

You sell a business in the UK by working through 11 steps in order: decide what you are selling, get a valuation, prepare the business, choose how to sell, market it confidentially, agree terms with a qualified buyer, complete due diligence, deal with staff, sign the legal documents, settle the tax and hand over. This guide argues that most of what decides the price and the speed of a sale is settled before a buyer ever sees your business. Preparation, not negotiation, is where owners win or lose value. It is written for UK owner-managers selling for the first time, and for the accountants and solicitors who advise them.

At a glance:

Most of the price is decided in preparation: clean accounts, a secure lease and a business that runs without you.

Selling shares or selling assets changes the tax you pay, what happens to your staff and how the paperwork works.

Business Asset Disposal Relief becomes less generous for larger gains from 6 April 2027, so take advice on timing early.

Step 1: Decide why, when and what you are selling

Before you speak to a buyer, decide why you are selling, when you want to leave and exactly what is for sale. Those answers shape the deal structure, the tax you pay and the buyers who will be interested.

Every serious buyer will ask why you are selling, so give an honest answer and keep it consistent. Decide too what the sale includes: the company or just the trade, the property or only the lease, and any vehicles or stock.

Share sale or asset sale

If your business is a limited company, you can sell your shares, or the company can sell its business and assets. Sole traders and partnerships can only sell assets.

In a share sale the buyer takes over the company itself, with its history, contracts, staff and liabilities. Because the buyer inherits everything, expect deeper due diligence and wider warranties.

In an asset sale the buyer chooses what it takes, typically the goodwill, equipment, stock, lease and trading name. Most liabilities stay with the seller, which is why many buyers of small businesses prefer this route. Staff assigned to the business usually transfer to the buyer under TUPE (see Step 8).

The tax differs too. A sale of shares may qualify for Business Asset Disposal Relief (see Step 10). When a company sells its assets, the company pays Corporation Tax on any gain, and taking the proceeds out creates a second tax charge. Ask your accountant to compare both routes before you agree heads of terms.

Timing, your personal plans and your tax position

In our experience, the best time to sell is when trading is steady or rising, the lease has years to run and you still have the energy for a long process. A sale launched after two weak years, or after you have mentally moved on, tends to take longer and achieve less.

Decide whether you want a clean break, a short handover or a role with the buyer, and whether you would accept part of the price after completion. Many buyers will ask.

Under HMRC’s policy paper of 29 October 2026, the Business Asset Disposal Relief lifetime limit falls from £1 million to £500,000 for disposals on or after 6 April 2027. If your gain could exceed £500,000, speak to your accountant about timing before you go to market.

Step 2: Get a realistic valuation

A realistic valuation tells you what a buyer is likely to pay, not what the business is worth to you. Get one before you decide to sell, because it shows whether a sale will fund your plans and what to fix first.

Owners often anchor on years of effort; buyers anchor on risk and on the profit they can expect to keep. Our guide on how to value a business covers the methods in depth.

The Department for Business and Trade’s Business population estimates 2025 counted about 5.7 million private sector businesses in the UK at the start of 2025, and 99.2% of them employed fewer than 50 people. Yet no official series records what businesses of that size sell for, as our UK Business Valuation Market 2026 review explains. Figures on price, timing and cost in this guide therefore come from our own transactions, not official data.

How buyers value small businesses

Most buyers of small businesses start from maintainable profit: the profit the business can be expected to keep making under a new owner. For owner-managed firms that usually means net profit adjusted for one-off costs, the owner’s personal spending and the cost of replacing the owner’s own role.

That profit is multiplied by a figure reflecting risk, growth and how easily the profit will transfer. Multiples come from what similar businesses have sold for, which is why comparable transactions valuation carries weight in owner-managed deals. In our experience, multiples vary too widely by sector and quality for any single figure to be a reliable guide.

Smaller owner-managed businesses without a management team usually sit toward the lower end of their sector’s range. Recurring contracts, a broad customer base, a long lease, clean records and a capable team move a business up the range. Reliance on the owner, one dominant customer or patchy accounts move it down. Our overview of business valuation methods shows how each approach treats these factors.

When assets matter more than profit

A loss-making business, an equipment-heavy manufacturer or a business that owns its freehold is often valued on its net assets, instead of or alongside its profit.

An asset-based business valuation adjusts each balance sheet item to a realistic market value: property, plant and machinery, vehicles and saleable stock. Goodwill may be small, or nil, if profits are weak.

Buyers rarely pay book value for slow-moving stock or ageing machinery, and stock is usually counted and valued at completion, so the final figure can move. If you own the freehold, selling the business on a new lease and keeping the property can widen the pool of buyers who can afford it.

Step 3: Prepare the business for sale

Preparing a business for sale means making it easy for a buyer to understand, trust and take over. It is the stage that most affects price and speed, and the one owners most often rush.

Every problem you fix before launch is one a buyer cannot use to cut the price, so start a year or more ahead if you can.

Accounts and trading records

Buyers, lenders and their accountants will rely on your figures, so they need to be current, consistent and easy to follow. File statutory accounts on time, keep management accounts up to date, and make sure VAT returns and payroll records reconcile with them.

If you run a car, a phone or family wages through the business, list each item with evidence so a buyer can add it back to profit with confidence. Profit that does not appear in the accounts cannot be valued, because buyers and lenders can only work from declared figures. In our experience, buyers most often lose confidence when the figures disagree, with accounts, VAT returns, bank statements and till records telling different stories.

Leases, licences and key contracts

For many small businesses the lease matters as much as the profit. Check how long it has left, whether it can be assigned, when the next rent review falls and whether the landlord’s consent is needed. A short unexpired term can make a business hard to finance, so talk to your landlord about an extension or a new lease before you launch.

Check whether each licence, permit and registration can pass to a buyer or must be applied for again. For pubs, bars and shops that sell alcohol, that includes the premises licence (see Step 9).

Review key contracts with customers, suppliers and franchisors, as some allow the other party to end or renegotiate if ownership changes.

Reducing reliance on you as the owner

A business that depends on its owner is worth less, because the profit may leave when you do. Buyers ask who holds the customer relationships, who knows the suppliers and who could run the business for a month without you.

Put a capable manager in place, write down how the business runs and introduce key customers to other members of the team. In trade firms the qualifications and certifications often sit with the owner, an issue our guide to selling an HVAC business looks at in detail. A buyer will accept a handover period, but a business that already runs without you earns more confidence, and usually a better price.

Step 4: Choose how to sell

You can sell through a business broker, sell privately, or sell to someone you already know, such as staff, family or a competitor. The right route depends on the reach, confidentiality and support you need, and on whether an obvious buyer already exists.

Route	Who it suits	Confidentiality	Reach	Cost	Main risks
Through a business broker	Owners wanting wide reach and a managed process	Anonymised listings, vetted buyers and non-disclosure agreements	The broker’s buyers and marketing	A fee agreed in writing at the start	Choosing a broker for the highest suggested price, not the most realistic
Selling privately	Owners with time, sector contacts and negotiating experience	Hard to control, as you handle every enquiry yourself	Your own adverts and network	No broker fee, but advertising costs and much of your time	Unqualified buyers, leaks to staff or customers, no one managing the process
To someone you know: staff, family or a competitor	Owners with a natural successor or an interested rival	Good with staff or family; weaker with a competitor who may not proceed	One buyer only	Lower marketing cost; professional fees still apply	An untested price, funding gaps, deferred payments, misuse of information by a competitor

Whichever route you choose, you still need your own solicitor and accountant. Sales to staff or family still need a proper valuation, written terms and independent advice, because without competing offers the only check on price is the evidence.

Step 5: Market the business confidentially

Market the business so that the right buyers learn enough to be interested, without staff, customers, suppliers or competitors finding out it is for sale. Confidentiality protects the value you are trying to sell.

A leak can unsettle staff, worry customers and help competitors, and the damage can outlast a sale that falls through. Good practice in confidential business sales starts with an anonymised listing that gives the sector, region, turnover and profit without naming the business.

Interested buyers then give their background and funding, and sign a non-disclosure agreement before they receive the name or detailed figures. At Blacks we vet enquiries before presenting them to sellers, and for higher-privacy sales we restrict key details in marketing until a buyer is qualified. Our guide to protecting sensitive information in a confidential sale covers what to share at each stage.

A short sales memorandum saves time and shows buyers the business is well run. Hold viewings out of hours or with an agreed explanation for staff. In our experience, buyers’ first questions at a viewing rarely change. They want evidence of turnover, the length of the lease, the staffing position and your reason for selling.

Step 6: Qualify buyers and negotiate the offer

Qualify every buyer before you negotiate: check that they can fund the purchase, run the business and complete in your timescale. Then agree the main terms in writing, because how and when the price is paid matters as much as the headline figure.

Proof of funds and how buyers finance a purchase

Ask for proof of funds early. A cash buyer should show bank statements; a borrower should show an agreement in principle from a lender and evidence of their deposit.

Most buyers of small businesses combine savings with bank lending, and some add asset finance or ask you to defer part of the price. The British Business Bank’s Small Business Finance Markets Report 2026, published in March 2026, found that gross bank lending to UK smaller businesses rose 9% to £68bn in 2025. That covers all smaller-business lending, and a lender will still judge your business on its accounts, lease and reliance on you.

Heads of terms, deposits and deferred payments

Once you accept an offer in principle, the main points go into heads of terms. These cover the price, what is sold, how and when it is paid, any handover, conditions such as finance or landlord consent, and a timetable.

Heads of terms are mostly not legally binding, but clauses on exclusivity and confidentiality usually are. Agree a limited exclusivity period, so a slow buyer cannot hold you off the market indefinitely.

If a buyer pays a deposit, set out in writing whether and when it can be refunded. Be cautious with deferred consideration and earn-outs, where part of the price is paid later or depends on future performance. They can bridge a gap in price or funding, but they move risk onto you. Ask your solicitor about security, such as a personal guarantee or a legal charge.

Step 7: Due diligence

Due diligence is the buyer’s detailed check that the business is what you said it was. It covers finances, tax, legal matters, property, staff and operations, and it is where poor preparation turns into price cuts or lost deals.

The buyer’s advisers send questions and document requests, often through an online data room. Answer promptly, accurately and completely, because slow or inconsistent answers raise suspicion even when nothing is wrong. Our guide to the UK business transfer process shows how this stage fits the legal timetable.

Document	Why buyers ask for it
Statutory accounts, usually the last three years	To confirm profit, trends and the valuation basis
Current management accounts	To check trading since the last accounts
VAT, payroll and tax records	To find tax exposures that could pass to them
Bank statements	To match money banked to reported sales
Lease and landlord correspondence	To confirm the right to trade there and the term left
Licences, permits and registrations	To confirm the business can trade legally under new owners
Staff list, contracts and pay records	To plan for TUPE and the true cost of staffing
Key customer, supplier and franchise contracts	To check terms, renewals and change of control clauses
Asset register and finance agreements	To confirm what is owned, leased or must be settled
Insurance, health and safety and fire risk records	To assess compliance and claims history
Disputes and complaints	To price or exclude liabilities
Company records and share register, for share sales	To confirm who owns the shares

Expect the buyer to find something. Most issues can be handled through a price adjustment, a specific indemnity or a disclosure (see Step 9), provided you raise them early. In our experience, three problems most often stall or reprice a sale here: a lease too short for the buyer’s lender, records that do not reconcile, and staff or contract issues found late.

Step 8: Staff, TUPE and when to tell people

In an asset sale, TUPE requires staff representatives to be informed before the transfer, so employees will learn of the sale before completion. In a share sale those duties usually do not arise, because the employer does not change.

Acas guidance on what a TUPE transfer is explains that TUPE applies when the employer changes, its main assets transfer to a new employer and the business activities stay the same or similar. All employees assigned to the business transfer automatically, and the employer cannot choose who moves. Acas adds that TUPE is not likely to apply to a transfer of shares only. Acas covers England, Scotland and Wales; in Northern Ireland, the Labour Relations Agency gives equivalent guidance.

Both the seller and the buyer must inform a recognised trade union or elected employee representatives, and consult them about any changes that will affect staff. Acas guidance on informing and consulting in a TUPE transfer explains when an election is needed and when smaller employers can consult staff directly. A failure can cost up to 13 weeks’ uncapped gross pay for each affected employee.

Under Acas guidance on employee liability information, the seller must give the buyer details of transferring staff at least 28 days before the transfer. If the information is late or wrong, the buyer may claim at least £500 for each employee affected.

Telling staff too early risks losing good people; telling them too late can breach these duties and damage trust. A key manager may need to know earlier, under a confidentiality agreement, because buyers often want to meet them. In our experience, the right moment is once the transaction is well advanced, usually after heads of terms are agreed and the buyer’s funding is secure. Agree with the buyer what staff will be told, so they hear one consistent account.

Step 9: Legal documents and completion

A sale becomes legally binding when the sale agreement is signed, and ownership passes at completion; in many small business sales both happen on the same day. Your solicitor drafts or negotiates the documents, but you are responsible for the truth of every statement in them.

Use a solicitor who handles business sales regularly, and instruct them before heads of terms are signed.

The sale agreement, warranties and the disclosure letter

The sale and purchase agreement sets out what is sold, the price, how it is paid and what happens if things go wrong.

Warranties are statements of fact about the business, such as that the accounts are accurate. If one proves untrue and the buyer suffers a loss, the buyer may claim against you. Indemnities are promises to repay a specific loss in full, such as an unpaid tax bill, whether or not anyone foresaw it.

The disclosure letter lists the exceptions to the warranties, such as a pending claim, and a fair disclosure usually prevents a later claim on that point. Your solicitor will also negotiate limits on your liability: a cap, a time limit and a minimum claim size. Expect restrictive covenants that stop you competing or approaching customers and staff for a set period.

VAT, licences and other transfers

An asset sale can fall outside the scope of VAT as a transfer of a going concern, if the conditions in HMRC’s VAT Notice 700/9 are met. In outline, the assets must be sold as part of the business, the buyer must intend to carry on the same kind of business and there must be no significant break in trading. If you are VAT registered, the buyer must be registered or required to register, and property opted to tax needs extra steps. A buyer who takes over your VAT number also takes on that registration’s outstanding VAT liabilities, so many prefer a new one.

In England and Wales, transfer of a premises licence is governed by sections 42 to 46 of the Licensing Act 2003. The buyer applies to the licensing authority, and the police may object within 14 days in exceptional circumstances on crime prevention grounds. Scotland and Northern Ireland have their own licensing laws and procedures, so take local advice there.

Plan the lease assignment, landlord’s consent and supplier accounts too. If the sale includes a freehold or a lease, the buyer may owe property transfer tax. GOV.UK’s Stamp Duty Land Tax guide covers England and Northern Ireland; Scotland has Land and Buildings Transaction Tax and Wales has Land Transaction Tax.

Step 10: Tax when you sell

Most owners pay Capital Gains Tax on the gain they make when they sell, and many can reduce it with Business Asset Disposal Relief. What you pay depends on the structure, the date of the sale and your own tax position.

Capital Gains Tax and Business Asset Disposal Relief

HMRC’s Capital Gains Tax rates and allowances set the rates for individuals at 18% and 24% from 6 April 2026, with an annual exempt amount of £3,000 for 2026 to 27. Gains within your unused basic rate band are taxed at 18%, and gains above it at 24%.

Under GOV.UK’s Business Asset Disposal Relief guidance, qualifying gains are taxed at 18% for disposals on or after 6 April 2026, up from 14% in 2025 to 26 and 10% before 6 April 2025. For a share sale, you usually need to have been an employee or office holder of a trading company for at least two years. Throughout that period you must also have held at least 5% of its shares and voting rights, with matching economic rights. Sole traders and partners usually need two years of ownership. As the relief rate now equals the lower main rate, its value lies in gains that would otherwise be taxed at 24%.

If part of the price is deferred, tax on it may fall due before you receive it, so ask how deferred or contingent payments will be taxed. Sole traders should also follow GOV.UK’s guide to stopping self-employment: tell HMRC you have stopped trading, send a final Self Assessment return and close any PAYE scheme.

Changes from 6 April 2027

Budget 2026 Annex A: rates and allowances shows a Business Asset Disposal Relief lifetime limit of £1 million for 2026 to 27 and £500,000 for 2027 to 28. The relief rate and main rates are unchanged, and HMRC’s policy paper confirms that past claims count towards the new limit.

Where an unconditional contract is made before 6 April 2027 but completes later, the gain will be capped at £500,000. The exception is where the parties show they did not enter into the contract with a purpose of obtaining a tax advantage; connected parties must show wholly commercial reasons. Legislation is due in the Finance Bill 2026, so take advice before setting a timetable around the change.

Budget 2026 also proposed a 10% Founders’ Relief from 6 April 2027, set out in HMRC’s policy paper on Founders’ Relief. Its conditions, including turnover of at least £10 million and at least 15 qualifying employees, put it beyond most businesses this guide is written for.

An illustrative tax calculation

This example is illustrative only. It uses the HMRC rates above and assumes a higher rate taxpayer selling qualifying shares, with no earlier claims and no other gains in the year. The gain, after the cost of the shares and allowable selling costs, is £800,000.

Line	Sale completes in 2026 to 27	Sale completes on or after 6 April 2027
Gain	£800,000	£800,000
Less annual exempt amount	£3,000	£3,000
Taxable gain within the lifetime limit, at 18%	£797,000, giving £143,460	£500,000, giving £90,000
Taxable gain above the lifetime limit, at 24%	Nil	£297,000, giving £71,280
Total Capital Gains Tax	£143,460	£161,280

In 2026 to 27, £797,000 at 18% is £143,460; without the relief, the same gain at 24% would cost £191,280. On or after 6 April 2027, only £500,000 qualifies. HMRC’s helpsheet HS275 explains that the annual exempt amount is set against gains in the way most beneficial to you, so it reduces the gain taxed at 24%. The bill is £17,820 higher than for the same sale a year earlier.

Spouses and civil partners who each own qualifying shares have their own lifetime limits and annual exempt amounts. Real bills depend on personal circumstances, including income, past claims and how the price is paid.

Step 11: Handover and life after the sale

After completion you hand the business over, usually with a period of support for the buyer, while the covenants and any deferred payments in the agreement continue.

In our experience at Blacks, handover periods range from a few days to several weeks or months, depending on the business and the buyer. They usually cover introductions to key customers, supplier relationships and training in how the business runs. Agree the length, the hours and any payment in the sale agreement.

Afterwards, keep to the restrictive covenants, diarise deferred payments and warranty time limits, and ask for regular figures if payments depend on performance.

Selling a business you built can feel like losing part of your identity, even when the sale goes well. It helps to decide what comes next, whether retirement, a new venture or simply time, before completion day arrives.

How long does it take and what does it cost to sell a business?

In our experience, most UK business sales take six to 12 months from going to market to completion. The main costs are the broker’s fee, legal fees and tax advice. Both vary with the size, sector and complexity of the business, and no official body publishes figures for either.

The timings below are indicative; you can see examples among the businesses we have sold.

Stage	Indicative time, from Blacks experience
Valuation and appointing advisers	A few weeks
Preparation, if the accounts, lease or reliance on the owner need work	12 to 24 months
Going to market to completion, straightforward and well-prepared sale	Three to six months
Going to market to completion, typical sale	Six to 12 months
Going to market to completion, complex corporate sale	More than 18 months

As an indicative range from our experience, not an official statistic, broker fees usually run from 1% to 10% of the sale value. The percentage tends to fall as deals get larger, and many brokers also charge a smaller upfront fee.

Solicitors’ fees for a business sale typically range from £5,000 to £25,000, and tax advice from £2,000 to £10,000. Share sales with full warranties sit toward the upper end. Ask every adviser for a written estimate, and check what is payable if the sale does not complete.

What to do next

If you are thinking of selling in the next year or two, start with three things. Get a realistic valuation, talk to your accountant about structure and tax timing, and review honestly what a buyer will find in due diligence.

Gather your last three years’ accounts, current management figures, your lease and your licences. Fix what you can fix cheaply, such as overdue filings and undocumented add-backs. If your gain could exceed the new lifetime limit, agree a plan with your accountant before you agree heads of terms with a buyer.

Frequently asked questions

How long does it take to sell a business in the UK?

There is no official figure for how long business sales take. In our experience, most sales take six to 12 months from going to market to completion, and a straightforward, well-prepared sale can complete in three to six months. Buyer finance, landlord consent, licence transfers and the state of your records usually decide the timetable, so the better prepared you are, the faster due diligence tends to run.

Do I have to tell my staff I am selling?

Not at the start. In an asset sale, TUPE requires the seller and the buyer to inform staff representatives before the transfer and consult them about any changes. The seller must also give the buyer employee information at least 28 days before. In a share sale the employer does not change, so those duties usually do not arise. Many owners tell staff once the sale is close to certain.

Should I sell the company or the assets?

It depends on tax, liabilities and what the buyer will accept. A share sale passes the whole company, with its history and liabilities, to the buyer, and may qualify for Business Asset Disposal Relief. An asset sale lets the buyer choose what it takes and leaves most liabilities with the seller, but a company that sells its assets can face two layers of tax. Ask your accountant and solicitor to compare both.

How much does a business broker charge?

No official body publishes broker fees, and they vary between firms and with the size and complexity of the sale. As an indicative range from our experience, fees usually run from 1% to 10% of the sale value, lower for larger deals. Many brokers also charge a smaller upfront fee. Ask any broker to set out in writing what it charges, when each fee is payable and what happens if the business does not sell.

Can I sell a business that is not making a profit?

Yes, although the price will usually reflect the assets, the premises or the potential rather than the earnings. Buyers of loss-making businesses often pay for equipment, stock, a good location or a valuable lease, and some buy to merge the business into their own. A clear explanation of why profits have fallen, and what a new owner could change, helps buyers see the value.

If you are weighing up a sale, a realistic view of value is the right place to start. You can request a free business valuation, which is confidential, or read about selling your business with Blacks and speak to our selling team when you are ready.

This guide is general information, not legal, tax or financial advice. Speak to your solicitor and accountant before you agree a sale structure.