Planning to Sell Your Business? Start Thinking About It Now

Why timing matters more than most people think

The businesses that achieve the best outcomes when they sell are almost always the ones that started planning two to three years before they were ready to go to market. That is not because the transaction itself is particularly complex - it is because the value of a business at exit is heavily shaped by decisions made long before any buyer appears. A business that has been run with a sale in mind for two or three years will typically present better, attract stronger offers, and complete more smoothly than one where the decision to sell was made recently.

What buyers look for

Whether you are selling to a trade buyer, a management team, or a private equity investor, the fundamentals they assess are broadly the same. Clean, well-organised financial records that are easy to interrogate. A clear and consistent profit trajectory over recent years. No significant customer concentration - a business where 60% of revenue comes from one client is a riskier acquisition. Directors' remuneration that is clearly documented and defensible. Any personal expenses removed from the business. These things take time to establish and demonstrate, which is why early planning matters.

Business Asset Disposal Relief

Business Asset Disposal Relief (BADR, formerly Entrepreneurs' Relief) can reduce the rate of Capital Gains Tax payable on the sale of qualifying business assets to 10% on gains up to £1 million. This is a significant saving compared to the standard CGT rates, and it is one of the most valuable reliefs available to business owners. However, there are conditions to meet - including the length of time the business has been owned and the seller's involvement in the business - and these need to be in place for at least two years before a sale. Planning ahead gives you time to ensure you qualify.

Structuring the business ahead of a sale

There are several structural decisions that can meaningfully affect both the value you achieve and the tax you pay on exit. These include the ownership structure of the business, whether goodwill and intellectual property are held in the right entity, how surplus cash in the business is managed, and whether the business operates from premises it owns or leases. Each of these has tax implications that are easier to address with time than in the weeks before completion.

When to start the conversation

If you are thinking about an exit in the next three to five years - even if the timeline feels uncertain - the right time to have an initial conversation is now. Not because we will sell the business for you, but because the earlier we are involved in the planning, the more options you have. We work with business owners across Edinburgh and Glasgow on exit planning and can introduce you to trusted corporate finance advisers when the time is right. Get in touch to arrange a conversation.