How do you prepare a business for sale?

This is the action plan. Work through the steps roughly in order; the earlier ones usually take longest.

1. 1

   Stage 1: Define your objective and timing

   Full exit or continuing role, preferred route and an approximate date range. These shape everything else.

2. 2

   Stage 2: Understand current business value

   A realistic view of value early on shows whether your objectives are achievable and which improvements matter most.

3. 3

   Stage 3: Reduce owner dependency

   Transfer customer relationships, delegate decisions and step back from day-to-day operations.

4. 4

   Stage 4: Strengthen management

   Build a credible team with real authority and a second tier beneath it.

5. 5

   Stage 5: Improve financial reporting

   Timely, consistent management accounts, a budget and forecast, and identifiable exceptional or personal costs.

6. 6

   Stage 6: Review customer and supplier concentration

   Measure dependence on key accounts and suppliers and reduce it where practical.

7. 7

   Stage 7: Document contracts and processes

   Put key arrangements in writing and capture how the business actually works.

8. 8

   Stage 8: Resolve shareholder and legal issues

   Align shareholders, review agreements and clarify ownership of assets and intellectual property.

9. 9

   Stage 9: Prepare records for scrutiny

   Organise financial, corporate, employment and contractual records before anyone asks for them.

10. 10

    Stage 10: Choose when to begin a formal process

    Start a sale or succession process once the business, the owner and the chosen route are ready.

How long does this take?

Most owners need one to three years to work through these steps properly, with owner dependency and management development usually taking longest. See our guide to how long it takes to exit a business.

This guide is general commercial information based on professional experience of UK SME transactions. It is not legal, tax, accounting or financial advice, and transaction-specific requirements vary. Take advice from appropriately qualified professionals before acting.