Signs it’s time to sell your business
Deciding when to move on can be difficult. Some common indicators include:
- You can realise significant capital from a sale.
- The business has reached the limit of what you can achieve.
- You’re ready for a new challenge.
- The next generation is prepared to step in.
- Running the business no longer brings you enjoyment.
Think carefully about your long-term goals, personal finances, and what you hope to achieve by exiting. These factors will guide whether preparing a business for sale, passing it on, or closing it down is the best route for you. Speaking with advisers such as accountants, business brokers, or lawyers can help you understand the financial and legal implications of your decision.
Selling to a third party
A clean sale to an outside buyer is often the most straightforward way to realise value. You’ll usually achieve the highest price and have a fresh start without obligations to the new owner.
Practical steps include:
- Obtaining a professional valuation so both parties agree on fair value.
- Engaging a broker or adviser to negotiate on your behalf.
- Researching what comparable businesses have sold for.
- Tidying and updating your business before listing it.
- Presenting a clear business plan that outlines future opportunities.
If you’re asking how to sell my business to someone outside the company, preparation is essential. The more work you put into maximising business value before selling, the stronger your negotiating position will be.
Selling to a business partner
If you have one or more co-owners, they may be interested in purchasing your share of the business. This pathway is often seen in professional partnerships or small firms, where a partner is already committed to the long-term future of the business. An independent valuation is essential at the outset, as it provides clarity and helps avoid disputes over price.
Depending on your partner’s financial position, the buy-out might be structured as staged payments rather than a single lump sum. You’ll also need to address any governance changes early and document agreements in writing to prevent misunderstandings. While this type of transaction can feel more personal than selling to a third party, it can be highly effective when partners share a common vision for the business’s future.
Selling to employees
An employee buy-out can be an appealing option. Staff already understand the business and often want to carry it forward with minimal disruption.
If an individual employee doesn’t have enough capital, you may help them arrange finance or structure payments over time. Selling internally can preserve customer relationships and maintain business culture.
Succession planning for family businesses
If you’re exiting a family business, transferring ownership to the next generation may feel like a natural step. A next generation business takeover can work well if the person is capable, committed, and already embedded in operations.
To make the process easier:
- Communicate your intentions early with family members.
- Agree on who is best qualified to lead.
- Seek external valuations to avoid disputes.
- Involve professional advisers to help manage discussions.
- Address potential conflicts of interest openly.
While business succession vs sale can be a tough choice, prioritise what’s best for the business itself. If a family member has the right skills and experience, this option can create continuity and stability.
Passive ownership with a management team
If your business generates steady cashflow, you might prefer to step back rather than sell outright. Hiring a manager or promoting an existing employee allows you to remain an owner while leaving day-to-day operations in trusted hands.
This option can provide an income stream through dividends, while freeing your time to pursue other interests. It’s particularly relevant if your long-term goal is to keep the business in your portfolio.
Partial sale
In some cases, selling only part of the business may be more suitable. Options include:
• Selling shares to employees as part of succession.
• Attracting outside investors while keeping a stake.
• Partnering with another business to build a stronger entity.
This approach offers flexibility, financial liquidity, and the chance to remain involved without carrying all the responsibility.
Liquidating assets and closing
Sometimes selling isn’t practical, particularly if you are the business’s only employee or goodwill is hard to transfer. In these cases, liquidation may be the most realistic option.
Closing involves:
- Selling business assets for cash.
- Repaying debts, tax, and outstanding obligations.
- Meeting legal responsibilities around winding up.
Although less ideal, this path can prevent ongoing losses and protect you from trading while insolvent. Seek professional guidance if you think this might apply.
Planning for retirement
For many owners, exiting is closely linked to retirement. In this case, it’s important to align your exit strategy planning with your long-term financial goals. Think about whether you’ll rely on the lump sum from selling the business, or whether you’d prefer ongoing dividends by keeping part ownership while handing day-to-day management to someone else.
Model different income scenarios with your accountant or financial adviser. Will the proceeds from selling the business cover expected years of retirement?
Starting this process early gives you time to prepare both financially and personally. By thinking ahead, you can step into retirement with confidence, knowing your business exit strategy supports not just your future lifestyle, but also the continued success of the business you’ve built.
Next steps
- Reflect on your long-term personal and financial goals.
- Decide whether selling, succession, or closure is the right path.
- Engage advisers such as accountants, brokers, or lawyers.
- Start preparing your business early to maximise its value.
