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Selling a business isn’t just a finance event, it’s a life event. One day you’re the person everyone turns to, the next you might be handing over the keys, or sharing them, or passing them to the team you built.
For UK SME owners, the three most common routes are a partial exit, a full sale, or a management buyout (MBO). Each can work well, but they feel very different day to day. They change your control, your risk, your time, and the kind of pressure you carry after the deal.
That’s why a good Business Planning Exit starts with two questions, not one: what does the business need, and what do you need? Timing matters, but so does health, family, purpose, and what you want your working week to look like next. Consult EFC supports owners through that thinking, then helps get the numbers, story, and plan in shape so the route you pick fits real life, not just a spreadsheet.
What each option really means, and what you give up (or keep)
It helps to strip away the headlines and talk about what you’ll actually experience.
A partial exit usually means you sell a minority stake (or sometimes a majority stake while staying on), often as part of a recapitalisation. You take some cash out now, then keep building value with a new investor at your side.
A full sale means you sell 100% of the shares (or the business assets) to a buyer. That buyer might be a competitor, a larger firm, or an investor that plans to hire a new leader once you’ve handed over.
A management buyout means you sell to your existing management team, usually supported by external funding. You’re backing the people who already run parts of the business, rather than selling to someone new.
The trade-offs aren’t just financial. They show up in meetings, decision rights, and how much of your headspace the business still takes. Deal structures can also change the risk you carry. For example:
- An earn-out is when part of your sale price depends on future performance after completion.
- Seller finance (often via loan notes) is when you accept some payment over time, rather than all at completion.
These are normal features of deals, but they change what “exit” means in practice.
Partial exit: take money off the table while staying in the driver’s seat
A partial exit is like selling a slice of your house to fund a renovation, while still living there. You get liquidity now, and you keep a meaningful say in what happens next.
In practice, it might be selling 20% to 49% to a private investor, or doing a recap where you take cash out and the business takes on some funding to support growth. Owners often choose this when they still enjoy the work, see a clear growth path, and want to reduce personal risk.
The upside is clear: you de-risk, you keep momentum, and you can share the load with a partner who wants the business to grow. The best partial exits also build options. If growth goes well, a later full sale can be bigger.
The downside is also clear: you’re not done. You now have another shareholder with expectations. Reporting gets tighter, budgets matter more, and you may need to justify decisions that you once made on instinct. You can also see a lower price per share than a full sale because buyers pay more for control.
Full sale: the clean break, and the strings that can still come with it
A full sale is the simplest to explain. You sell the business, receive the proceeds, and move on. Many owners want this because they’re tired, ready for a new chapter, or they don’t want to share control.
A full sale can also produce the highest headline valuation, especially when the buyer is strategic and can gain synergies. If your business helps them grow faster, they can justify paying more.
But “clean break” is often a myth. Many full sales include a handover period, sometimes 6 to 18 months. Some include earn-outs, which means you still care about how the business performs after completion. You may also face warranties and indemnities, which are legal promises about what’s true in the business, and claims can come back to you if something was missed.
Culture can change fast too. Even with good intentions, a new owner may change pricing, staff structure, systems, and brand position. If you care deeply about legacy, this matters.
Management buyout (MBO): selling to your team, with funding and risk to manage
An MBO is often the most human route. You’re selling to people you know, and customers often like the continuity. It can protect culture and keep relationships steady, which is valuable in service firms where trust is the product.
It can also be quicker when the team is ready, because they already understand the business. There’s less “getting to know you” work than with an external buyer.
The hard part is funding. Most managers can’t write a cheque for the full amount. An MBO commonly uses bank debt, external investors, and vendor loan notes (you take some payment over time). That means the seller can still carry risk after completion.
Price can also be lower than a competitive external sale, because the buyer pool is smaller and the funding mix has limits. Many owners still choose it because certainty and legacy can be higher, even if the valuation headline isn’t.
How to choose the right route for your business and your personal goals
There’s no “best” exit route. There’s only best-fit, for your numbers and your life.
A useful way to choose is to run two tracks in parallel. First, get honest about what you want. Then, pressure-test what the business can support without putting you, your family, or the company under strain.
You’re trying to answer three questions:
- How much control do you want to keep, and for how long?
- How certain do you need the money to be, and when?
- How much risk and workload are you willing to carry after signing?
Start with your life plan: money needs, time, and what you want your week to look like
Owners often start with valuation. A better start is: what does “enough” look like?
For some, it’s paying off personal guarantees and clearing the mental load. For others, it’s funding retirement, supporting children through university, or creating space to focus on health. Some owners want to step away for six months and then start another business, others want to work two days a week, keep purpose, and reduce stress.
Be specific. Do you want to stop being the person who approves everything? Do you want evenings back? Do you want to stop thinking about payroll on holiday?
Also consider emotional readiness. If your identity is tied to being “the owner”, a full sale can feel like stepping off a moving train. A partial exit can be a gentler change, but only if you’re happy to share the steering wheel.
Then pressure-test the business: growth, risk, and how dependent it is on you
Your exit options depend on how the business looks to a buyer or investor. They’ll pay for results they can trust, and for a future that doesn’t rely on one person.
Common pressure points include recurring revenue, gross margin stability, customer concentration, contract terms, and how strong your second line is. If one client makes up 40% of turnover, or if you personally hold every key relationship, your deal options narrow fast.
This “key person risk” hits partial exits and MBOs in particular. A minority investor wants comfort that the business can scale with proper management information. An MBO needs managers who can lead, not just deliver.
Clean monthly numbers matter too. Good buyers don’t want perfect accounts, but they do want consistent reporting, clear cash flow, and sensible forecasts. When the finances are messy, buyers protect themselves with tougher terms.
Compare control, certainty, and total value, not just the headline price
A high headline price can still leave you disappointed if the structure is risky.
Start by separating price from proceeds. Proceeds are what you keep after tax, fees, debt, and working capital adjustments (the part of cash and stock the buyer expects to be left in the business).
Then look at when you get paid. Cash at completion is certain. Deferred consideration is conditional. Earn-outs depend on performance and on how the business is run post-sale. Loan notes depend on future cash flow and the buyer’s discipline.
Control matters even if you stay on. A minority investor can change how decisions get made through reserved matters, board seats, and reporting requirements. This can be positive, but it can also make your job feel like it has more supervision than before.
A helpful lens is risk-adjusted value. What’s the value of a deal you can bank, sleep on, and build a life around?
Deal terms that can make or break any exit
Owners often focus on “which route”, then get surprised by the small print. The route sets the tone, but the terms decide how it feels and how safe it is.
Getting ahead of the detail reduces stress and improves outcomes. It also stops you agreeing to something in a tired moment, then spending months trying to unwind it.
Earn-outs, loan notes, and seller finance: when you are still carrying risk
Here are the basics in plain English:
- Earn-out: extra payment later if targets are hit.
- Loan note: part of the price paid over time, often with interest.
- Seller finance: a broad term for you funding part of the deal (loan notes are a common form).
Earn-outs show up often in full sales, especially where future growth is promised but not yet proven. Loan notes are common in MBOs because managers need time to fund the purchase. Partial exits can use mixed structures, depending on the investor.
What can go wrong? Targets can be set on measures you can’t control. Costs can be moved around. Priorities can change after completion. If you don’t have clear reporting rights, you can end up arguing about numbers rather than building value.
Protection comes from detail. Definitions should be tight, reporting should be regular, and control rights should match the risk you’re carrying. If you’re still on the hook for outcomes, you need a say in the levers that drive them.
Tax and timing basics in the UK, and why planning early matters
This isn’t tax advice, but structure affects what you keep.
In the UK, a sale of shares can produce different outcomes from an asset sale. Reliefs may apply depending on the facts and current rules, and the timing of your exit can change the result. Many owners also compare other routes in 2026, such as employee ownership, because tax outcomes can be material. Still, the core decision often comes back to the same three paths: partial exit, full sale, or MBO.
The practical point is simple: early planning gives you choices. If you wait until you’re burnt out or forced by life events, you’re more likely to accept a structure that suits the buyer first.
Due diligence readiness: the paperwork that stops deals from stalling
Most deals don’t fail because the buyer changes their mind overnight. They fail because the business can’t prove what it claims, fast enough.
Buyers tend to test: management accounts, normalised EBITDA (profit with one-offs removed), cash flow, customer contracts, intellectual property, HR terms, compliance, and working capital. They also look for consistency between your story and your numbers.
“Quality of earnings” means this: are the profits repeatable, or are they propped up by one-offs, founder heroics, or accounting quirks?
This is where Consult EFC adds real value. When your accounts are clean and timely, and your performance story is backed by evidence, you don’t just look better, you negotiate from a stronger position.
What 2026 looks like for SME exits, and how to use it to your advantage
In early 2026, the UK SME exit market feels more constructive than it did a year ago. Deal volumes fell in 2025, but investment levels rose, which points to buyers focusing on stronger businesses and being willing to pay for quality. Private equity remains active, and structured deals are common. Partial exits are also more visible as founders look for flexibility.
For owners, this changes the playbook. You can still sell well, but buyers want proof, and they’ll use terms to manage risk. If your business is well-run and well-presented, that selectivity can work in your favour because you stand out.
Why partial exits are growing, and what investors expect in return
Partial exits are growing because owners want to reduce risk without stepping away. It’s a rational response to uncertainty and to the simple fact that many founders still like building.
The trade is governance. Investors expect better reporting, clearer KPIs, and a plan they can track. They also tend to have targets and timeframes, even if they’re a minority holder. Staying in still changes your role. You move from “doer and decider” to “leader with accountability”.
Owners who enjoy structure often thrive here. Owners who hate being measured can find it draining.
Where full sales are still winning, and how to avoid getting trapped by terms
Full sales still win where strategic buyers want to consolidate, remove a competitor, or add a capability fast. They can pay more because they can extract value others can’t. They may also move quickly when the fit is clear.
The traps are usually in the terms, not the price. Aggressive earn-outs, forecasts that only work with perfect conditions, and post-sale restrictions that limit your next move can all take the shine off a deal.
A competitive process helps when you can run one. Even one credible alternative can improve terms, because it shifts the balance from “please buy me” to “choose between options”.
Conclusion
A partial exit tends to suit owners who want cash now but still want to build. A full sale fits owners who want the clearest break and can accept a structured handover. An MBO often suits owners who value legacy and continuity, and trust their team to take over.
The best exit is the one that meets your personal goals and protects value, not the one with the biggest headline. Start Business Planning Exit early, get the financials clean, build a management team that can run without you, and think through terms before pressure forces your hand. If you want advisory and accounting support to prepare properly and choose the right route, speak with Consult EFC.
