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How to sell your business when you want to retire (UK & EU guide)

· 5 min read

There is rarely a single moment when an owner decides to retire. More often it is a slow realisation: the business runs well, the team is capable, and you would like the next ten years to look different from the last thirty. Then the practical questions arrive. Who would buy it? What is it worth? What happens to the people who helped build it? And how do you even start without the whole town finding out?

This guide is written for owners of established, profitable businesses in the UK and the EU who are starting to think about selling so they can retire. It is not a substitute for your own accountant or lawyer, but it should help you ask them better questions.

Start earlier than feels necessary

The single most useful thing you can do is give yourself time. A sale is a process, and the owners who get the outcome they want are usually the ones who started planning a year or two before they wanted to step back.

Time lets you tidy the things a buyer will look at, such as clean accounts, up-to-date contracts and a team that can run the day-to-day without you. It also gives you room to say no. An owner under pressure from health, a deadline or simple exhaustion has less choice about who to sell to and on what terms.

Starting early does not mean telling anyone. It means quietly getting your house in order.

Decide what "a good outcome" means to you

Price matters, of course. But when owners talk honestly about retirement, other things come up just as often:

  • Your people. Will the team keep their jobs and their terms?
  • Your name. Will the company carry on as it is, or be folded into someone else's brand?
  • Your customers. Will they still get the service they have relied on for years?
  • Your own involvement. Do you want to walk away completely, or stay on for a while, or keep a stake?
  • Your premises. If the business owns its building, do you want to sell that too, or keep it and collect rent?

Write your answers down before you speak to any buyer. They shape which kind of buyer suits you, and they give you a firm position when the conversations start.

Understand who might buy

Broadly, there are a few kinds of buyer for an owner-managed business:

  • A trade buyer, often a competitor or a larger company in your sector, looking to grow or add capability.
  • Your own management team, through a management buyout.
  • A private equity firm, which buys with a view to selling again, usually within a few years.
  • A long-term principal buyer, which buys businesses to own and run them, with no planned resale.

Each has strengths and drawbacks, and we look at them in more detail in our article on business succession without a family successor. The short version is that they differ less in whether they will pay a fair price and more in what they intend to do with the business afterwards.

Get the numbers in shape

Any serious buyer will want to see several years of accounts. Three years is a sensible minimum to have ready, together with up-to-date management figures for the current year.

Buyers usually think about value in terms of sustainable profit, often expressed as EBITDA (earnings before interest, tax, depreciation and amortisation). It helps to know how your own accounts translate into that figure, and to be ready to explain anything unusual, such as a one-off cost, a director's salary that is above or below market rate, or personal expenses run through the company.

Ask your accountant to walk through the last three years with you as if they were a buyer. Anything that takes a long explanation is worth tidying now.

Make yourself less essential

This is the hardest step for many owners, and the most valuable. If every key customer relationship, supplier negotiation and pricing decision runs through you, a buyer will worry about what happens when you leave.

Over the year or two before a sale, it pays to:

  • Introduce a trusted manager to your main customers.
  • Write down how things are done, from quoting to quality checks.
  • Let others make decisions you would normally make, and see how it goes.

None of this means stepping back before you are ready. It means showing that the business you built can carry on without you in the room.

Think about tax early, and take proper advice

How a sale is structured has a real effect on what you keep. In the UK, for example, Business Asset Disposal Relief can reduce the Capital Gains Tax due on a qualifying sale of a trading business, but the conditions, the lifetime limit and the rates have all changed in recent years. In Spain and other EU countries the treatment depends on whether you hold the shares personally or through a holding company, where you are tax resident and the local rules.

We are not tax advisers, and the rules change. Speak to your own tax adviser well before you agree a price, because some planning only works if it is in place in advance.

Selling shares or selling assets

There are two basic ways to sell a company. In a share sale, the buyer buys the company itself, so contracts, licences, employees and the trading name stay exactly where they are. In an asset sale, the buyer picks the assets and contracts it wants, which can be more disruptive and may need customer and supplier consents.

For a retiring owner, a share sale is often simpler and cleaner. It is also the route we prefer at Neocore Holdings, because nothing has to move. Your own lawyer can explain which suits your circumstances.

Keep it confidential

Owners often delay because they fear word will get out. A properly run process protects against that. A buyer should sign a non-disclosure agreement (NDA) before you share anything sensitive, and you should decide when and how your staff, customers and suppliers are told.

How long it takes

A realistic sale, from first conversation to completion, often takes a few months. At Neocore we aim for about 8 to 16 weeks from first call to completion, depending mostly on how quickly information can be shared, and you get a firm yes or no from us within 20 working days of seeing three years of accounts. If you want a slower, phased exit, the timing should follow your plans, not the buyer's.

Talk in confidence

If you own a profitable business in Manufacturing & Automation; Transport, Logistics & Storage; Construction & Services; Facility Management; Management & Consulting; Environmental & Waste; Rail, Marine & Airports; or Mining, Minerals, Oil & Gas, with £/€1m–25m turnover and £/€250k+ EBITDA, and you are starting to think about retirement, we would be glad to talk. Neocore Holdings buys businesses to keep them. Options include a full sale, a majority sale, a phased handover and, where it suits, the premises too.

A first call takes 30 minutes and commits you to nothing. Use the confidential enquiry form on our home page or email hello@neocore.uk. Bring your adviser if you have one.

Start a confidential conversation

General information only, not tax, legal or financial advice. Please take your own professional advice.