Quick answers to the most common questions about buying and selling a business in the UK. Each answer links to a deeper guide where one exists.
Contents
Selling a business
How do I sell a business in the UK?
Prepare your accounts and documents, understand what your business is worth, protect confidentiality, write a clear listing, screen buyers before sharing information, manage offers and due diligence carefully, and use legal and tax advice before completing. The process typically takes three to twelve months from listing to completion.
Full guide:How to Sell a Business in the UK
Do I need a business broker to sell?
Not necessarily. Many sellers use a marketplace like Buy a Business Ltd to list and manage their own sale, which saves on broker fees and keeps them in control. A broker adds most value when the business is complex, valued above £500k–£1m, or when the seller has no experience of the process and wants someone to manage it for them. If you do use a broker, check the fee structure, any upfront costs, the lock-in period and exactly what is included in the service.
Read more:Business broker fees UK | How to sell a business without a broker
How long does it take to sell a business?
Most small business sales take between three and twelve months from listing to completion. The main variables are how well prepared the seller is, how quickly a suitable buyer is found, and how smoothly due diligence goes. Sales that fall through at due diligence and have to restart add significant time. Being well prepared before you list is the single most effective way to reduce the timeline.
Read more:How long does it take to sell a business?
What documents will buyers ask for?
Buyers typically ask for three years of accounts, management accounts, VAT returns, bank statements, PAYE and payroll records, the lease and any side letters, key customer and supplier contracts, a staff list with roles and salaries, an asset list, stock information, details of any HMRC correspondence or disputes, and IP registrations. Prepare these before you list — having them ready speeds up the process significantly.
Download:Seller Document Pack Checklist
What is an add-back and why does it matter?
An add-back is an adjustment to the business profit figure to remove costs that are owner-specific or one-off, and that a new owner would not incur. Common examples include an owner salary above the market rate for a replacement manager, personal vehicle costs run through the business, and one-off legal fees. Add-backs increase the adjusted profit figure, which affects valuation. Buyers and their accountants will challenge every add-back, so document each one clearly.
Read more:What is adjusted EBITDA?
Can I sell a business that is not making a profit?
Yes, though it is harder and the pool of buyers is smaller. Asset-rich businesses, businesses with strong revenue and temporary profit issues, businesses with valuable intellectual property, or businesses in high-demand sectors can still attract buyers. You need to be realistic about price and transparent about the situation. Trying to hide losses or dress up the figures will come out in due diligence and kill the deal.
Read more:Can I sell a business that is not making a profit?
What if my business is not selling?
The most common reasons a business does not sell are overpricing, poor presentation, inadequate financial evidence, or a structural issue that buyers are walking away from. Review the asking price against comparable listings, improve the quality of your listing and financial pack, and seek honest feedback from anyone who has enquired and not proceeded. Sometimes a price reduction is necessary; sometimes the issue is something fixable.
Read more:What to do if your business is not selling | Should you reduce the asking price?
How do I keep the sale confidential?
Use a confidential listing that does not reveal your trading name, specific address, staff names or customer details. Screen buyers before sharing detailed information and ask serious buyers to sign a non-disclosure agreement (NDA) before receiving accounts, customer lists or supplier information. Tell staff only when necessary — ideally close to completion.
Read more:How to protect confidentiality when selling a business | What is an NDA?
What happens to my staff when I sell?
TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) may apply when a business changes owner. If it does, employees may transfer to the new owner on their existing terms and conditions. You have obligations to inform — and in some cases consult — staff before completion. Take employment-law advice before communicating with staff or agreeing completion terms.
Read more:Staff transfer and TUPE when buying or selling a business
Can I sell part of my business?
Yes. It is possible to sell a division, a subsidiary, a product line or a stake in the business rather than the whole thing. Partial sales are more complex and usually require specialist legal and tax advice. The structure of a partial sale — share sale, asset sale, management buyout, or equity investment — has significant implications for both parties.
Read more:Can you sell part of a business?
Buying a business
How do I buy a business in the UK?
Define what you are looking for and what you can afford, search listings carefully, verify the business before making an offer, make all offers conditional on due diligence and legal review, carry out thorough checks, and use a solicitor and accountant before signing anything. The process takes time — rushing it is one of the most common mistakes first-time buyers make.
Full guide:How to Buy a Business in the UK
What should I check before making an offer?
Before making an offer, check the accounts against Companies House filings (for limited companies), cross-reference turnover with VAT returns, understand the profit calculation and any add-backs, review the lease, check staff arrangements and payroll, identify any customer concentration risk, and ask about any outstanding HMRC issues or disputes. Request financial evidence before committing to anything.
Read more:How to check a business before making an offer | How to read small business accounts before buying
What questions should I ask the seller?
Ask why they are selling, how long they have owned the business, how profit is calculated (including what add-backs are claimed), what assets are included, how many staff there are and who is key, what is left on the lease and whether it is assignable, whether any large customers account for a significant share of revenue, and whether there are any outstanding debts, disputes or HMRC issues.
Download:Business Buyer Question List
What is due diligence?
Due diligence is the buyer's formal, structured investigation of the business before committing to purchase. It covers financial checks (accounts, bank statements, VAT returns), legal checks (contracts, lease, IP, disputes), operational checks (staff, systems, customer concentration), tax checks (HMRC position, VAT, PAYE) and sector-specific requirements. It typically takes two to six weeks for a small business.
Full guide:Due diligence checklist for buying a business
Should I buy through a limited company or personally?
Both are possible. Buying through a limited company can have tax advantages, including potential relief on interest and different treatment of goodwill, but it also adds complexity. You must seek independent, qualified tax advice before deciding which approach is right for your situation.
Read more:Buying a business through a limited company
Can I buy a business while still employed?
Yes, in many cases. However, your employment contract may contain restrictions on outside business activities, and there are practical considerations around time commitment and conflict of interest. Review your employment contract and take advice before proceeding.
Read more:How to buy a business while employed
Valuation
How much is a business worth?
Most small UK businesses are valued on a multiple of adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) or Seller's Discretionary Earnings (SDE). The multiple depends on sector, earnings quality, growth, owner dependency, lease, assets, staff and risk. Some businesses — particularly asset-heavy ones — are valued primarily on assets rather than earnings.
These are general principles only. Actual value depends on the specific business, buyer demand, deal structure and professional assessment. The figures on any listing are asking prices, not verified valuations.
Full guide:Business valuation UK
What is adjusted EBITDA?
Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, adjusted to remove one-off, unusual or owner-specific costs that a new owner would not incur. It is used as the basis for valuation multiples on most small and medium UK business sales. An add-back schedule sets out what has been adjusted and why.
Read more:What is adjusted EBITDA?
What multiples are used to value a small business?
Multiples vary significantly by sector, earnings quality and risk. As a broad illustration, asset-light service businesses and SaaS businesses tend to attract higher multiples; hospitality, retail and trade businesses tend to attract lower ones. These are broad market examples only and do not constitute a valuation of any specific business. A professional valuer or accountant with transaction experience in your sector is the right person to advise on a realistic figure.
Full guide:Business valuation UK
What is goodwill?
Goodwill is the value of a business above and beyond its tangible assets — it represents things like brand reputation, customer relationships, established trading history and staff knowledge. In many small business sales, goodwill makes up the majority of the purchase price. It is treated differently in share sales versus asset sales for tax purposes.
Read more:What is goodwill in a business sale?
Finance
How do I finance buying a business?
Most buyers use a combination of personal savings and some form of external finance. Options include business acquisition loans from banks or specialist lenders, Government-backed Start Up Loans, seller finance (where the seller loans part of the price), earn-out arrangements, or a combination. The British Business Bank provides tools and guidance to help smaller businesses explore finance options. You must seek independent financial advice before committing to any funding arrangement.
Full guide:How to finance buying a business in the UK
What is seller finance?
Seller finance is where the seller agrees to loan part of the purchase price to the buyer, repaid from business profits over an agreed period. It is common on smaller deals where full bank finance is not available, or where the seller wants to demonstrate confidence in the future performance of the business. The terms — interest rate, repayment period, security — should be agreed in writing and reviewed by both parties' solicitors.
Read more:What is seller finance?
What is an earn-out?
An earn-out is an arrangement where part of the purchase price is deferred and paid based on the future performance of the business after the sale. It protects the buyer if the business underperforms post-completion and can help bridge a valuation gap between buyer and seller. Earn-outs need careful legal drafting to define the performance metrics, measurement period and payment terms clearly.
Read more:What is an earn-out?
What is working capital and why does it matter?
Working capital is the cash needed to run the business day-to-day — paying suppliers, covering wages, managing stock and handling normal trading. Buyers need to ensure they have sufficient working capital in place from day one, in addition to the purchase price. Sellers and buyers sometimes negotiate a minimum working capital level as part of the deal.
Read more:Working capital in a business sale
Legal and deal structure
What is the difference between a share sale and an asset sale?
In a share sale, the buyer purchases the company itself — all assets, contracts, liabilities and history transfer automatically. In an asset sale, the buyer purchases specific assets (goodwill, equipment, stock, contracts) rather than the company entity. Share sales are often preferred by sellers for tax reasons. Asset sales are sometimes preferred by buyers because they can choose what to acquire. Each structure has different legal and tax implications and you must seek independent advice before agreeing which route to take.
Read more:Share sale vs asset sale UK
What are heads of terms?
Heads of terms (sometimes called a letter of intent) set out the key agreed terms before formal legal documentation begins. They typically cover the agreed price and payment structure, what is included and excluded, the exclusivity period, key conditions, and the target completion date. Heads of terms are usually not legally binding except for exclusivity and confidentiality clauses.
Read more:Heads of terms in a business sale
What is exclusivity?
Exclusivity is an agreement that, for a defined period, the seller will not negotiate with or accept offers from other buyers. It gives the buyer time and confidence to spend money on due diligence and legal work. Exclusivity is usually agreed as part of heads of terms and is typically one of the few legally binding elements of that document.
Read more:Exclusivity in a business sale
What are warranties and indemnities?
Warranties are statements the seller makes in the sale agreement about the accuracy of information — for example, that the accounts are true and fair, that there is no undisclosed litigation, and that contracts are in force. If a warranty proves false, the buyer may be able to claim compensation. Indemnities are more specific promises to cover the buyer against defined losses. Both should be reviewed carefully by your solicitor.
Read more:Warranties and indemnities in a business sale
What is a non-compete clause?
A non-compete clause is an agreement that the seller will not start or join a competing business for a defined period and within a defined geography after completion. It protects the goodwill the buyer has paid for. Non-compete clauses need to be reasonable in scope, duration and geography to be enforceable. Your solicitor should draft or review any such clause as part of the sale agreement.
Read more:Non-compete clauses in a business sale
What happens if the sale falls through?
Sales can fall through for many reasons — failed due diligence, buyer finance issues, lease consent refused, a change of mind, or a material change in the business. If a deal falls through after heads of terms, costs already incurred (legal fees, professional advice) are usually not recoverable unless a specific break fee was agreed. Both parties should understand this risk before committing significant time and money.
Read more:What happens if a business sale falls through?
What is TUPE?
TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) may apply when a business changes owner. It can protect employees' existing terms and conditions and affect how the transfer is managed, what must be communicated before completion and what obligations transfer to the buyer. The rules depend on the structure of the sale. Both buyers and sellers should take employment-law advice before agreeing completion terms.
Read more:Staff transfer and TUPE when buying or selling a business
Tax
What tax do I pay when I sell a business?
The tax you pay depends on how the sale is structured, whether you are selling shares or assets, your personal tax position, and whether you qualify for any reliefs. The main taxes to consider are Capital Gains Tax (CGT) on the gain from the sale, and potentially Income Tax if any element of the payment is treated as income. You must seek independent, qualified tax advice before agreeing deal terms, completion date or sale structure.
Read more:Tax when selling a business UK
What is Business Asset Disposal Relief (BADR)?
Business Asset Disposal Relief (formerly Entrepreneurs' Relief) may reduce the CGT rate on qualifying business disposals. According to GOV.UK, the BADR rate for qualifying disposals is 18% for disposals from 6 April 2026, 14% for disposals between 6 April 2025 and 5 April 2026, and 10% for disposals on or before 5 April 2025. The relief is subject to conditions including share ownership thresholds, length of employment or directorship, and a lifetime limit. Do not assume you qualify — you must seek independent, qualified tax advice before agreeing deal terms or completion date.
What is a TOGC for VAT purposes?
A Transfer of a Going Concern (TOGC) is a way of structuring a business sale so that the VAT treatment differs from a standard asset sale. HMRC VAT Notice 700/9 explains when a transfer may qualify as a TOGC and how VAT should be handled. Both buyer and seller need to handle the structure correctly. Take advice from an accountant or VAT adviser before completion.
Read more:VAT and TOGC in a business sale
Does Stamp Duty Land Tax apply when buying a business?
SDLT may apply if the transaction involves property, a lease premium, or an assigned leasehold. The treatment depends on whether a new lease is being granted or an existing lease is being assigned. Your solicitor should confirm the SDLT position early in the process so it can be factored into your budget.
Due diligence
What does due diligence involve?
Due diligence is the buyer's structured investigation of the business before completion. It covers: financial checks (accounts, bank statements, VAT returns, add-back review), legal checks (contracts, lease, IP, disputes, regulatory licences), operational checks (staff, systems, customer and supplier concentration), tax checks (HMRC correspondence, VAT registration, PAYE), and sector-specific requirements. The seller should prepare a data room with all key documents before marketing.
Full guide:Due diligence checklist for buying a business | Business sale data room guide
What is a data room?
A data room is a secure shared folder (usually digital) containing all the documents a buyer needs for due diligence — accounts, contracts, lease, staff information, VAT records, HMRC correspondence and so on. Sellers who prepare a data room before listing speed up the process significantly and signal to buyers that the business is well-run and ready to sell.
Read more:Business sale data room guide
What if the accounts are not available?
Some smaller businesses — particularly sole traders and cash-based businesses — may have limited formal accounts. This does not make them unsellable, but it does make verification harder. Buyers can look at bank statements, VAT returns, booking systems, till records and accountant-prepared summaries as alternative evidence. The less documentation available, the higher the perceived risk — and the lower the price a buyer will pay.
Read more:Buying a business with no accounts
Confidentiality and NDAs
What is an NDA in a business sale?
A non-disclosure agreement (NDA) — sometimes called a confidentiality agreement — is a legal document that prevents the person signing it from disclosing confidential information they receive about the business. Sellers should ask buyers to sign an NDA before sharing management accounts, customer lists, staff information or supplier contracts. A serious buyer will not object to signing one.
Read more:What is an NDA in a business sale?
What information should be kept confidential during a sale?
The business trading name, specific address, staff identities, customer names, full accounts, supplier pricing, and operational details should not be shared publicly or with unverified enquirers. Your public listing should contain enough information to attract serious buyers — sector, location at region level, headline financials, what is included — without revealing confidential details.
Read more:How to protect confidentiality when selling a business
Listings and marketing
How do I write a good business-for-sale listing?
A good listing explains what the business does in plain English, why it is attractive to a buyer, what is financially included (turnover and adjusted profit), what assets are included, why the owner is selling, and what handover support is offered. Clear numbers and plain facts outperform vague marketing language every time.
Read more:How to write a business-for-sale listing | What to include in a business-for-sale advert
How do I screen buyer enquiries?
Before sharing any detailed information, ask enquirers: how they plan to fund the purchase, whether they are buying personally or through a company, why they are interested, and whether they will sign an NDA. Ask for proof of funds before entering heads of terms. A serious buyer will understand and cooperate.
Read more:How to screen buyers | How to respond to buyer enquiries
Safety and fake listings
How do I spot a fake business-for-sale listing?
Warning signs include: a seller who will not confirm their identity or provide verifiable evidence, pressure to pay a deposit or transfer money quickly, financial figures with no supporting documentation, unusually high profits relative to the asking price, stock photos used instead of real ones, and a refusal to allow professional advisers or site visits. Always verify before paying anything.
Full guide:Fake business for sale listings — how to spot them
How do I report a suspicious listing on Buy a Business Ltd?
If you see a listing that you believe is fraudulent, misleading or does not comply with our platform rules, use the reporting tool on the listing page. We review all reports and take appropriate action. Do not transfer money or share personal financial details with any seller before verifying their identity.
Read more:Report a suspicious listing | Confidentiality and Safe Enquiries Policy
About Buy a Business Ltd
What is Buy a Business Ltd?
Buy a Business Ltd is a UK business-for-sale marketplace where business owners can list their businesses for sale and buyers can search for businesses to acquire. We are a marketplace, not a broker or adviser. We do not act for buyers or sellers, provide valuations, or give legal or financial advice.
Read more:How Buy a Business Ltd Works
Does Buy a Business Ltd verify listings?
We have a listing review process and a set of marketplace rules that sellers must follow. However, as a marketplace, we cannot independently verify all financial claims made in listings. Buyers should always carry out their own verification and due diligence before making any offer or payment.
Read more:Listing Review Policy | Seller Rules | Buyer Rules
Can Buy a Business Ltd give me advice?
No. Buy a Business Ltd is a marketplace and does not provide legal, tax, financial, valuation, brokerage or regulated advice. All guides, checklists and FAQ answers on this site are for general information and education only. You must seek independent professional advice for your specific situation.
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Important disclaimer
Buy a Business Ltd is a marketplace, not a broker. Information, guides, checklists and FAQ answers on this site are for general guidance only and do not constitute legal, tax, financial, investment, valuation, brokerage or regulated advice.
Buying or selling a business involves risk. You must seek independent professional advice before buying, selling, valuing or financing a business.