The Business Sale Process: A Timeline from Decision to Completion

Selling a business typically takes 12 to 24 months from the moment you decide to sell to the day funds hit your account. Most owners underestimate the complexity. Not because it's impenetrable, but because nobody walks you through it beforehand. This guide does exactly that: every stage, in order, with honest commentary on what happens, who does what, and where things go wrong.

Table of Contents

What happens in the preparation stage?

Timeframe: 12–18 months before going to market

This is the stage most owners skip or rush, and it's the one that most directly affects your final price. Before any buyer sees your business, you need to make sure what they see holds up to scrutiny.

At this stage, you're doing three things: cleaning up the financials, reducing dependency on you personally, and identifying anything a buyer might use to chip the price later. That last category. Called vendor due diligence in some processes. Matters more than most owners realise. A buyer will always find something. Better that you find it first and either fix it or have a prepared answer.

Practically, this means: three years of clean, well-presented management accounts; contracts with key customers that are in writing and not solely tied to your relationships; an EBITDA figure that reflects genuine business earnings rather than personal expenses run through the company; and a senior management team that can demonstrate they'll keep things running post-sale.

What can go wrong: Leaving this too late. If you engage advisers and go to market within three months of deciding to sell, buyers will spot the gaps. It weakens your position before negotiations have even started.

How do you select and appoint advisers?

Timeframe: 1–2 months

You'll need a corporate finance adviser (sometimes called an M&A adviser) to run the process, and a solicitor with genuine transactional experience. These are different disciplines. Your existing accountant and company solicitor may not be the right people for a business sale. This is specialist work.

Interview at least three corporate finance advisers. Ask them what comparable businesses they have sold, how they structure their fees, and who specifically will run your deal day-to-day. Fee structures typically combine a retainer (covering preparation costs) with a success fee calculated as a percentage of deal value. Success fees in the UK SME mid-market typically range from 2% to 5% depending on deal size.

What can go wrong: Appointing advisers on the basis of lowest fees rather than fit and track record. The success fee structure aligns interests well. An adviser who believes in your business will push harder on price. One who doesn't believe they can sell it at a good multiple won't.

What is an Information Memorandum and why does it matter?

Timeframe: 4–8 weeks to prepare

The Information Memorandum (IM) is the document that introduces your business to potential buyers. It covers the business model, financial history, market position, growth opportunities, and management team. It's prepared by your corporate finance adviser, working closely with you to get the numbers and narrative right.

The IM is only released to buyers who have signed a Non-Disclosure Agreement (NDA). It needs to be accurate. Any material inaccuracies can create legal exposure later. But it also needs to present your business in its best light. This is not the place for modesty. Buyers will make their initial assessments based on what's in this document.

What can go wrong: An IM that reads like it was written by a lawyer rather than someone who understands your sector. Buyers switch off quickly. The narrative around why your business is well-positioned and what the opportunity looks like for a buyer matters as much as the financials.

How does buyer outreach work?

Timeframe: 4–8 weeks

Your adviser will compile a longlist of potential buyers. Typically split between trade buyers (competitors, customers, suppliers, consolidators in your sector) and financial buyers (private equity and their portfolio companies). For most SME owner-managers, the longlist will be 30–80 names. From that, a shortlist of genuinely interested, qualified buyers emerges. Usually 8–15.

Each receives a brief teaser document. One or two pages, no company name. To gauge interest before the NDA is issued. Once signed, they receive the IM.

What can go wrong: Approaching the wrong buyers, or going too wide and creating a rumour in your market before you're ready. Confidentiality is genuinely fragile at this stage. Your adviser should be managing this carefully.

What happens at management presentations?

Timeframe: 2–4 weeks

Shortlisted buyers. Typically 4–8. Are invited to meet you and your senior team. These are usually half-day meetings, sometimes on site. The buyer is assessing the team as much as the business: can they see themselves backing these people, or working alongside them? You are also assessing the buyer. This is a two-way process.

Prepare thoroughly. Buyers will probe the customer concentration, key person risk, any anomalies in the financials, and your plans for the business under new ownership. Know your numbers cold.

What can go wrong: The owner dominating the presentation whilst the management team sits silently. If the business is entirely dependent on you, that's a risk factor. Let your team speak.

How do you evaluate indicative offers?

Timeframe: 2–3 weeks post-presentations

After presentations, buyers submit indicative offers. Also called Indicative Bid Letters. These are non-binding at this stage, but they establish the buyer's indicative valuation, proposed structure, and any conditions they'd want to explore in due diligence. Typical EBITDA multiples in UK mid-market SME transactions currently range as follows:

SectorTypical EBITDA Multiple Range
Manufacturing4x – 7x
Professional Services5x – 8x
Healthcare Services6x – 10x
Logistics & Distribution4x – 6x
Construction & Contracting3x – 6x
Recruitment4x – 7x
Business Services / FM4x – 7x

Your adviser will help you read between the lines. Headline price matters, but so does deal structure (how much is deferred, what are the earn-out conditions, how much remains in escrow).

What can go wrong: Focusing solely on headline value. A clean deal at a slightly lower number often delivers more to you than a complex structured deal at a higher headline that unravels in due diligence.

What are Heads of Terms and why do they matter?

Timeframe: 1–3 weeks to negotiate

Once you've selected a preferred buyer, you negotiate and sign Heads of Terms (HoTs). This document. Typically 4–8 pages. Sets out the key commercial terms: price, structure, exclusivity period, conditions, and timeline. HoTs are not legally binding on price, but they are binding on exclusivity (typically 6–10 weeks) and confidentiality.

Getting HoTs right is critical. The SPA negotiation that follows will reference back to them. Any ambiguity in HoTs becomes an argument in legal documentation. Your corporate finance adviser and solicitor should both be involved at this stage.

What can go wrong: Rushing to sign HoTs to lock in the buyer, without fully thinking through the structural details. Once you're in exclusivity, your leverage decreases.

What happens during due diligence?

Timeframe: 6–12 weeks

Due diligence is the buyer's formal investigation of everything they've been told. It covers financial, legal, commercial, tax, and sometimes operational areas. You'll be asked to populate a data room. A secure online repository of documents. And respond to queries from the buyer's advisers.

This is the most demanding phase for you as an owner. You're running your business whilst managing a significant volume of information requests. Your corporate finance adviser and solicitor should be coordinating responses and managing the process.

TUPE obligations, customer contract assignability, any HMRC enquiries, property leases, and pension arrangements are typical areas that attract detailed scrutiny.

What can go wrong: Surprises. Anything that contradicts what was in the IM will be used to renegotiate price or introduce new conditions. See the preparation stage above.

Timeframe: 4–8 weeks, running parallel with due diligence

The Share Purchase Agreement (SPA) is the main legal document. It governs price, payment mechanics, warranties, indemnities, and post-completion obligations. Warranty and indemnity (W&I) insurance is increasingly common in UK mid-market deals and can significantly affect how heavily negotiated the warranty schedule is.

This phase can feel interminable. It's worth remembering that most of the commercial negotiation is already settled. Legal drafting is giving legal form to what's already agreed.

What can go wrong: Legal fees escalating because the commercial deal was not clearly established. This is another reason why good Heads of Terms pay for themselves.

What happens at completion?

Timeframe: One day. But prep takes weeks

Completion is the exchange and simultaneous transfer of shares and funds. In most UK SME deals, exchange and completion happen on the same day. Funds are transferred, documents are signed (often electronically), and ownership changes. Companies House is notified. You're no longer the owner.

Post-completion, there will typically be a period during which you remain involved. Either under a consultancy agreement or an earn-out arrangement. The length and terms of this should have been agreed in HoTs.

The Business Sale Process: Stage-by-Stage Summary

StageTypical Duration
Preparation12–18 months
Adviser selection1–2 months
IM preparation4–8 weeks
Buyer outreach and NDAs4–8 weeks
Management presentations2–4 weeks
Indicative offers2–3 weeks
Heads of Terms1–3 weeks
Due diligence6–12 weeks
Legal documentation (SPA)4–8 weeks
Completion1 day

FAQ

How long does a business sale take in the UK? From the point of going to market with an adviser, typically 9–15 months to completion. Factor in 12–18 months of preparation beforehand if you want to sell at the best price.

What is Business Asset Disposal Relief (BADR) and does it apply to my sale? BADR (formerly Entrepreneurs' Relief) reduces Capital Gains Tax to 14% (from April 2026) on qualifying gains up to a lifetime limit of £1 million. You must have owned at least 5% of the company for at least two years. This article contains general information only and does not constitute financial or tax advice. Every business sale is different. Speak to a qualified UK tax adviser about your specific situation before making any decisions.

What is an earn-out and should I accept one? An earn-out ties a portion of the purchase price to the future performance of the business post-sale. They're common where there's uncertainty about sustainability of earnings, or where the buyer wants you to remain engaged. They can work well, but the devil is in the detail of how performance is measured.

What's the difference between a trade buyer and a private equity buyer? A trade buyer typically pays a one-off price and integrates your business into theirs. A private equity buyer usually wants management to retain equity and grow the business towards a second exit. PE buyers are not always the right fit for every owner or every business.

Can I sell my business without an adviser? Technically yes, but it's rarely advisable. Buyers use experienced advisers; you should too. The process is complex, confidentiality is difficult to manage without experience, and an adviser typically more than earns their fee through better price negotiation and deal management.

What happens to my employees when I sell? Employee rights are protected under TUPE (Transfer of Undertakings (Protection of Employment) Regulations). In a share sale, TUPE does not technically apply as the employing entity doesn't change. But employee communications still need careful handling. Your solicitor will advise on your specific obligations.

Understand What Your Business Is Worth Before You Start

Before any of the above makes sense in practice, you need a realistic view of what your business is likely to be worth in the current market. Use the free valuation calculator on the Succession Group website to get an indicative range based on your sector, revenue, and profitability. And to see how different deal structures affect what you actually receive.