Your business makes a good profit. You have loyal customers. Turnover is growing.

But would someone buy it if you stopped working there?

That is where exit planning becomes practical. A business can provide a good income for its owner while still being difficult to hand over.

To prepare your business for sale, focus on sustainable profit, reliable financial records, customer stability and a team that can operate without you. Then assess what a deal would actually leave you with.

Our previous article explained why exit planning should start years before you sell. Here are five questions to address while you still have time to improve the answers.

 

1. How much profit would remain after you leave?

 

A buyer needs to understand the earnings they could sustain under new ownership.

That means looking beyond the bottom line in your accounts and allowing for the true cost of running the business.

For example, imagine your company reports £250,000 of annual operating profit. You handle sales and operations, but take dividends rather than a salary, so your work carries no remuneration cost in the profit and loss account.

If replacing that work would cost £80,000 a year, including employment costs, sustainable operating profit could be nearer £170,000 before other adjustments.

This is an illustrative example.

Before discussing a valuation, identify genuine one-off income and costs, assess margins and calculate what it would cost to replace your contribution. A buyer will scrutinise those assumptions.

 

2. What happens when you are unavailable?

 

If every important decision, customer conversation and operational problem comes back to you, the buyer inherits a significant handover challenge.

Your experience is valuable. The question is how much of it has become part of the business itself.

Start by:

• Giving managers clear authority to make decisions.
• Documenting essential processes.
• Involving colleagues in key customer relationships.
• Building cover for critical responsibilities.

Try stepping back from selected tasks for a week. Record what still needs your intervention and use that list to decide what to improve next.

A functioning management team gives a buyer more confidence about what happens after you leave.

 

3. Can your figures stand up to scrutiny?

 

Due diligence is the buyer’s investigation of your business before completing the purchase. Your financial information needs to support the story you are telling.

Can you explain which customers generate the most profit? Why margins changed? How much cash the business needs each month?

Keep bookkeeping reconciled, maintain current management accounts and document the assumptions behind forecasts. Review overdue customer debts, director’s loans and outstanding tax liabilities before they become difficult questions in a sale process.

Regular management accounts also help you spot problems while there is still time to act.

Good records give you evidence to support your asking price.

 

4. How secure is the income you are selling?

 

A strong year is encouraging. A buyer also wants to understand how likely that performance is to continue.

Look at your largest customers. What proportion of sales and gross profit do they represent? What would happen if one left?

Review important contracts with your solicitor, including renewal dates and provisions that could affect them following a sale. Consider key staff, suppliers and any equipment needing substantial investment.

There is no need to eliminate every risk. You need to understand the significant ones and show how they are managed.

For example, reducing dependence on one large customer may improve your resilience today and your sale prospects later.

 

5. How much money would you actually receive?

 

The headline offer may differ considerably from the amount available to fund your next chapter.

Cash, debt and agreed working capital adjustments can affect the shareholder proceeds. Fees and tax reduce what you keep. Some payments may be deferred or depend on future performance through an earn-out.

The structure matters too. Selling your shares can produce a different tax outcome from the company selling its assets.

For qualifying disposals from 6 April 2026, Business Asset Disposal Relief applies an 18% Capital Gains Tax rate within an individual’s £1 million lifetime limit of qualifying gains. Previous claims reduce the remaining allowance. For a typical sale of company shares, relevant qualifying conditions generally need to have been met for at least two years. Review your eligibility well before a sale. See HMRC’s guidance.

Review your position before agreeing terms. Compare offers against your financial needs, payment certainty and how long you are willing to remain involved.

 

Where should you start with exit planning?

 

Choose the three issues most likely to affect your future sale. Give each an owner, a deadline and a monthly review.

You can begin this work before you have a buyer or a firm exit date.

At Money Fitness Accounting, we help owner-managed businesses in Gloucester and across England and Wales improve financial performance and prepare for future transitions through our exit planning support.

Thinking about selling in the next few years? Speak to our team about the financial weaknesses, owner dependence and tax considerations that could affect your exit, and which to address first.