Guide
Getting a business ready to sell: what to do first
Updated
Exit preparation fails when it is done in the order things are easy, rather than in the order a buyer will test them.
The order that works
- Years ahead: the tax clock
- Business Asset Disposal Relief requires the qualifying conditions to hold for at least two years up to the date of disposal, including being an officer or employee and holding at least 5% of the shares and voting rights in a trading company (gov.uk). Restructuring shareholdings shortly before a sale can reset the clock rather than help.
- Years ahead: owner dependence and concentration
- Both are changed by decisions and proved by trading history. Neither can be evidenced in the months before a sale.
- A year ahead: the numbers
- Get management accounts reconciling to the statutory ones, clear related-party balances, deal with the directors' loan account, and have your accountant run a quality of earnings review on your own figures.
- Months ahead: the paperwork
- Assign intellectual property and domains to the company, get customer terms in writing, formalise leases and licences, and put key employees on written contracts.
- Weeks ahead: the data room
- Three years of accounts, the client list with recurring value, staff list with role, salary and hours, premises details, software, and a sample of working papers. That list is close to what ICAEW says a buyer of a practice will ask for, and it generalises well (ICAEW).
The two statutory items people leave too late
Your relief position. The two-year condition is measured to the date of disposal. So is the trading company test, and the 5% personal company test. HMRC's Capital Gains Manual works through the statutory conditions at CG63975. Bringing a spouse or a child onto the share register in the run-up to a sale does not give them two years of history.
Your employees. Where a business or part of a business transfers to a new employer, TUPE transfers jobs, terms and conditions and continuity of employment, whatever the size of the business, and there are consultation obligations attached (gov.uk). A share sale does not trigger TUPE because the employer entity does not change. Which structure you are heading for changes what you must do, and when.
What preparation does not do
It does not set your price. The published median for UK SME transactions was 4.5 times EBITDA for the year to November 2025 (UK200Group SME Valuation Index), and no source publishes a reliable figure for what any individual readiness item adds. What preparation reliably does is remove the reasons a buyer has to reprice you after exclusivity, which is where value is most often lost.
Start with the checker. It walks the six items in the order a buyer's adviser tests them, which is also the order worth fixing them in.