The Art of the Exit: Selling Your Business

Illustration by Dan Page

Selling a business is one of the most significant events in an entrepreneur's life. It's not just a transaction—it's an emotional journey that requires careful planning, expert guidance, and a clear vision of what they want their life to look like after the sale.

I have sold several of my own businesses and helped many others sell theirs, usually for a substantially higher figure than they anticipated.

In this blog, I guide you through some of the crucial steps of preparing your business for sale, and look at areas worth considering throughout the process.

STOP PRESS: Here you can watch a vodcast that I recently recorded with James

West, Business Development Director at Magus Wealth, where we expand on this

topic in depth.

The Why and When of Selling a Business

Before jumping into the logistics of selling, it’s essential to ask two fundamental questions:

• Why are you selling? Is it for financial freedom? A new venture? Burnout?

• When is the right time? Selling when you're burned out or desperate usually leads to a reduced valuation. Timing the sale strategically—ideally when your business is thriving—is key.

One of the mistakes I’ve seen owners make is to treat their business sale as just another transaction. Selling a business is an entirely different challenge from running one, and approaching it with the wrong mindset can be costly.

Understanding the bigger picture and having a clear vision for what comes next is crucial.

What’s your number?

Before selling your business, you need to understand exactly how much money you need from the sale to achieve your financial goals, particularly if it’s a retirement sale. You’ll want to consider potential large expenditures like holiday homes, travel, education costs for children and grandchildren or helping them to get on the property ladder.

An experienced wealth manager can help you work out the number you need. With that number in hand, it’s possible to work ‘up’ the financial ladder through calculating taxes,  researching a likely range of multiple, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) and turnover, enabling you to reach an enterprise value goal.

Is it just about you?

When multiple partners are involved in a business, exit planning becomes more complex.

Different partners may have different timelines, financial needs, or personal situations.

Key considerations:

• Ensure you have a clear shareholders' agreement that addresses exit scenarios.

• Establish protocols for when some partners want to sell and others don't.

• Define how valuations will be conducted.

• Outline dispute resolution processes.

Without thinking ahead and having proper legal frameworks in place, partner disagreements during the sale process could become acrimonious and may even require legal intervention, which could potentially be irrevocably damaging to working relationships and to the value of the business.

Preparing your business for sale

Think of selling your business like selling a house—you need to fix the issues that could reduce its value, and highlight the features that make it attractive, possibly investing in new areas.

Identifying and addressing weaknesses

It’s the perfect time to conduct a RealityCheck®, which is like an MRI scan for your

business. This process is designed to identify factors that are likely to reduce enterprise value, such as:

• Costs: Inefficient operations or rising costs without clear RoI. 

• Revenues: Volatile revenues, over-reliance on too few customers / clients.

• Assets: Redundant or poorly performing assets—from underutilised IP to ageing

stock.

• Liabilities: Legal issues, outstanding debts, or messy ownership structures.

• Management Team: If the business can’t run without you, it’s worth less. A solid

leadership team signals strength and continuity post-sale.

• External Factors: Political, Economic, Social, Technological, Legal or Environmental (‘PESTLE’) factors that are outside your control.

Maximising business value

Conducting a RealityCheck® also identifies factors that are likely to increase enterprise value, such as:

• Scale: Buyers are drawn to businesses with proven, repeatable growth models. If you’ve built something scalable you’re in strong shape.

• Positioning and Brand Architecture: A clear brand story that occupies a well-defined niche commands attention.

• Channel Extension: A diversified presence across sales channels—e.g. retail,

partnerships, online—shows buyers there’s plenty of room to grow.

• Product Extension: Relates to a business moving away from its current product lines into new (and sometimes unrelated) products. For example, Disney moving from cartoons to theme parks to TV to cruise ships to streaming platforms.

• Product Innovation: Buyers want to know the business isn’t standing still. A track record and, ideally, a roadmap of innovation shows the business has a future beyond its current offering.

• Systems and Infrastructure: Strong systems create predictability and reduce reliance on key individuals. The more automated and documented your operations, the better.

• Culture and Talent: A motivated, capable team that’s aligned with the business vision can be a major asset. Stability here lowers risk for the buyer.

Success story: When I worked with Plantexpand, the RealityCheck® process uncovered a hidden asset of internally-developed software, which the owners believed was only a tool for their operations. I brought in a professional intangible asset valuation firm to assess it; they valued it at £1.2 million—far more than their initial estimate of £50,000-£100,000. This discovery significantly increased the business sale value achieved.

Navigating the Sale Process and Negotiations

Negotiating the sale of a business is both an art and a science. While a straightforward cash sale is ideal, many deals include an earn-out—a structure where part of the sale price is contingent on future business performance.

Challenges with earn-outs:

• Some business owners find it difficult to work as an employee under the new

ownership.

• Buyers may introduce management fees or strategic changes that impact profitability, reducing the earn-out payment.

• If the seller isn't mentally prepared, they may walk away prematurely.

To mitigate these risks, sellers should:

• Be crystal clear on their expectations during negotiations.

• Ensure financial forecasting accounts for post-sale transitions.

• Engage experienced advisers who can anticipate potential pitfalls.

Tip: If an earn-out is unavoidable, make sure you clearly define roles, responsibilities, performance metrics and anticipated management fees (if any) before closing the deal. 

Staying on track during the sale

Selling a business can be an emotional roller coaster. The process typically takes longer than expected; it requires balancing the demands of running your business while managing the sale, which can be all-consuming, time-sensitive and unpredictable.

You may struggle with the emotional aspect of ‘selling your baby’, have last minute wobbles about whether you’re doing the right thing, and you might be concerned about your employees’ future.

An experienced business coach who’s ‘been there, done that’ many times before can be very helpful to keep you grounded, and focused on the goal ahead.

Negotiating the sale

Effective negotiation demands that you understand the buyer's perspective and proactively address any potential concerns.

Best practices:

• Identify your ideal buyer type, e.g. a trade buyer, private equity firm or a high-net-worth individual.

• Focus on building trust through open communication leading to the creation of a ‘Heads of Terms’ or ‘Memorandum of Understanding’, before introducing lawyers into the process.

• Proactively identify and address the biggest risks a buyer might see in your business and develop strategies to mitigate those risks before they're raised.

Example: A gluten-free food manufacturer I worked with recognised that a potential ‘cure’ for coeliac disease would be perceived as a significant business risk. They proactively expanded their market to include ‘lifestyle’ consumers, reducing their reliance on the coeliac market to under 50% of their sales.

Life After the Sale

Post-sale planning is just as crucial as the sale itself. Many entrepreneurs struggle with the sudden void left behind once they’re no longer running their business. I always recommend taking a pause before jumping into the next thing.

It’s essential to work with a financial adviser to:

• Invest wisely: Protect and grow the wealth from the sale.

• Establish legacy planning: How should wealth be passed on to future generations?

• Consider philanthropy or mentoring: Some find fulfillment in guiding the next

generation of entrepreneurs.

One client of mine chose to retire and spend time pursuing personal passions, while another launched a new venture just six months post-sale.

Both approaches are fine—it depends on the individual’s aspirations and stage of life.

Tip: Clarify your post-exit aspirations early in the planning process, as they should influence your sale strategy, timing, and the type of buyer you target.

Final Thoughts

A successful business sale isn’t just about financial gain—it’s about ensuring the right

outcome for the seller, the employees, and the future of the business. By taking a strategic, well-prepared approach, owners can maximise value, reduce stress, and transition smoothly into their next chapter.

If you’re considering selling your business or want to explore your options, I’d be happy to have a no-obligation chat. Do get in touch.