What to do when Someone Asks to Buy a Business You Own
When you’ve spent years of hard graft building a prosperous company with a strong brand, there’s perhaps no greater accolade than an approach from a fellow entrepreneur keen to buy a business you own.
In our work as corporate finance experts, we meet many business owners who have been approached by someone who wants to buy their business. In some cases, they were thinking about selling anyway. In others, it wasn’t on the cards yet but it’s given them food for thought and planted the question in their minds – “Well, is now the right time?”
Beware of flattery
It can be very flattering when someone likes what you’ve crafted so much that they’re willing to pay serious money to take the reins. However, while compliments are very welcome, they should always be taken with a pinch of salt because they can pull the wool over your eyes.
With that in mind, if you do decide you’d like to sell your business following a speculative approach, by all means go ahead but keep your wits about you…
Stranger danger?
If an enquiry to buy a business you own arrives out of the blue, the potential acquirer could well be an unknown entity so do some careful research using trusted networks and contacts who understand the market well. A corporate finance consultant such as one of the Entrepreneur’s Hub team will be able to help you get more insight and clarity around this.
Sometimes it’s difficult to tell if a prospective buyer genuinely has adequate funds and facilities in place to purchase your business. Seek professional help to determine whether they’re serious or whether they’re just kicking tyres to see under the bonnet of your business.
Practical tips
Being courted by someone who wants to buy your business can be a hugely exciting time, so we’re not trying to scaremonger or arouse unnecessary suspicion. It’s just smart to be vigilant when something as important as your business is at stake.
Have you been approached? Here’s some advice to help you avoid the common pitfalls so you can sell your business with peace of mind – and for maximum value.
- Don’t fall into the trap of being ‘romanced’ and give too much away, too soon. If the acquirer is keen, they’ll remain patient (so going at your own pace might even be a useful litmus test of how genuinely interested they are)
- Work with an experienced adviser from an early stage – because you probably haven’t sold a business before whereas they’ll have the knowledge and impartiality to ‘stand in the gap’ and negotiate the best deal for you
- Get a non-disclosure agreement (NDA) arranged before meeting potential acquirers, to protect confidentiality. Make sure it’s yours, not theirs, and get it signed by both parties (if you need an example, get in touch with us)
- Carefully prepare an information memorandum – a sales document highlighting the opportunity in more detail, under NDA
- Collate future forecasts to show buyers the scope for business growth over the next 1-3 years but never give the full financials at this stage
- Open the option up to other acquirers – if you decide it’s the right time to sell your business, don’t be afraid to invite additional interest, not just from the buyer you were approached by in the first place. You want to be confident you have got true market value for your business (plus, it gives you a plan B if another interested party drops out of the race)
Selling a business is a complex process, as Andy Fewtrell, Chairman of Up and Under Group discovered:
“Entrepreneurs Hub helped me to prepare and sell my company. Selling a company is not easy, it’s emotional, and there’s work to do. I’m so pleased I engaged the Entrepreneurs Hub team to navigate and support us through the process.”
Who buys your business matters immensely, so it’s a process that must be skilfully driven. After some careful analysis of buyer credentials early on, you’ll be able to progress to the next stage with your chosen acquirer with true confidence. Then, once you’ve negotiated and procured offers and followed due diligence with the help of your corporate finance expert, it’ll be time to secure a deal that meets your exit objectives – leaving you to enjoy the next chapter of your life.
When someone asks to buy a business you own and you need expert guidance, you’ll know you’re in safe hands with Entrepreneurs Hub. Find out more about how our central principles and proven approach can help you achieve your desired goals and aspirations by giving us a confidential call today on +44 (0) 845 067 8678 or emailing info@entrepreneurshub.co.uk
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FAQs – Selling Your Company
How do I sell my business in the UK?
Selling a business in the UK typically involves preparing financial information, obtaining a valuation, identifying suitable buyers and negotiating the terms of a sale. Most owners work with an M&A adviser to manage the process confidentially, approach qualified buyers and maximise the value achieved.
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
What is my business worth?
A business is typically valued using a multiple of its profit, usually EBITDA or adjusted net profit. The multiple depends on factors such as growth potential, recurring revenue, customer diversification and management strength. Professional valuation provides a realistic price range and helps position the business effectively for buyers.
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell a business?
Selling a business in the UK typically takes between six and nine months from preparation to completion. The timeline depends on business readiness, buyer demand and the complexity of due diligence. Early preparation and clear financial reporting can help shorten the process.
When is the best time to sell a business?
The best time to sell a business is when it is performing strongly, growth prospects are clear and you are not under pressure to sell.
Business owners often achieve the strongest outcomes when:
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Profits and revenue are growing
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Financial records are clear and well prepared
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There is visible future growth for buyers
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The owner has planned the sale 12–18 months in advance
Market conditions can also influence valuations. Strong buyer demand, sector growth and favourable economic conditions can increase acquisition activity, but a well-prepared business can attract interest in most markets.
Deal activity often increases during spring and autumn, although transactions complete throughout the year. In practice, preparation and business performance usually matter more than trying to perfectly time the market.
Ultimately, the best time to sell is when both the business and the owner are ready, with the company positioned to demonstrate strong value to potential buyers.
Do I need an adviser to sell my business?
Many business owners choose to work with an M&A adviser to manage the sale process. Advisers help value the business, approach qualified buyers confidentially and negotiate terms. This structured approach can increase the likelihood of achieving a higher value and a successful transaction.
How is confidentiality protected during a sale?
Confidentiality is protected through controlled information sharing, anonymous buyer approaches and strict non-disclosure agreements. Potential buyers receive limited information initially and must sign an NDA before any sensitive details are released. Business owners approve prospective buyers and maintain visibility over all documentation throughout the process.
How do I value my business before selling?
Valuing a business before selling usually involves analysing profitability, identifying valuation multiples and assessing key value drivers such as recurring revenue and customer concentration.
What’s the quickest way to sell a company?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
What’s the best way to sell a business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…