Slow down. The first move is not a reply.

Most business owners who receive an unsolicited approach do the same thing: they ring a friend, feel flattered, and reply too quickly. That is understandable. It is also how you hand over control of the conversation before it has even started.

Your first job is to separate genuine interest from a fishing trip. Many approaches, particularly those that feel vague, move fast, or come with pressure around timing, are exploratory at best. A real buyer will not object to a short delay. A time-waster will push hard for speed.

Keep your circle small. Telling staff too early creates anxiety. Telling customers creates doubt. Telling the wrong person in your network creates risk. For now, treat this as a confidential project and give it a code name if that helps you keep it quiet internally.

The three questions to ask yourself before you respond

• Do I actually know who this person is, who they represent, and whether they have the funds to complete a deal?
• Is this the right time for me to sell, or am I reacting to flattery rather than thinking strategically?
• Am I prepared with clean numbers and a clear view of what my business is worth?

If the honest answer to any of those is no, that is not a reason to ignore the approach. It is a reason to slow the pace and get prepared before you engage further.

Ask for it in writing. Every time, without apology.

Before you take a single call with a prospective buyer, ask for a written outline of their proposal. This is not being difficult. This is being professional. Any serious buyer will expect it and respect you for it.

What to ask them to include

• Price range or valuation approach, and what it is based on
• Whether they want to buy shares (the company) or assets (parts of it)
• How they plan to pay: cash at completion, deferred payments, earn-out, or loan notes
• Whether they have funding confirmed, and proof of funds if appropriate
• Their realistic timetable and who the actual decision-maker is
• Any conditions: “subject to finance”, “subject to due diligence”, and what that means in practice

Watch out for red flags. Phrases like “quick and clean process” and “we can move fast” often mean the buyer wants to control the timeline and, with it, the price. Fast does not mean fair.

Short. Calm. Professional. It sets the right tone from the very first exchange and immediately signals that you are not a pushover.

Get an NDA in place before you share a single number.

A non-disclosure agreement will not stop a bad actor from misusing your information. What it does is create a legal boundary, a clear record of what was shared and when, and a route to remedy if things go wrong. In a business sale context, that matters.

More importantly, an NDA signals to the buyer that you are organised and that you take confidentiality seriously. It raises the professional bar for the whole process.

What stage-appropriate information looks like

Not everything gets shared at once. Think in two stages:

• Early stage (teaser level): broad description of the business, the markets you serve, a high-level revenue band, and the general growth story. No customer names, no margin detail, no contracts.
• Later stage (after serious terms are agreed): detailed financials, customer concentration, supplier terms, key contracts, pricing structure, and anything that could damage you if it were leaked to a competitor.

Internally, keep the inner circle tight: you, your solicitor, and your finance lead or fractional CFO. That is usually enough at this stage. The more people who know, the more likely something leaks.

Know what your business is actually worth before they tell you.

Here is the uncomfortable truth: most business owners have an emotional number in their head and a financial reality in their accounts. The gap between the two is where deals fall apart, or where value quietly disappears.

Buyers pay for future cash flow, reduced risk, and growth they believe they can achieve once you are out of the picture. That means two businesses with the same revenue can be worth very different amounts depending on how predictable, scalable, and independent from the founder that revenue is.

The numbers every owner should know before engaging

• Current EBITDA (or normalised operating profit) and the trend over the last three years
• Recurring revenue percentage and your renewal or churn rate
• Gross margin trend and what is driving it
• Cash conversion: how closely does profit follow cash into the bank?
• Customer concentration: what percentage of revenue comes from your top three clients?
• Any personal or one-off costs currently sitting inside the business accounts

If those numbers are messy, inconsistent, or hard to pull quickly, that is a problem but it is a fixable one. Cleaning up your reporting before a sale is one of the highest-return activities you can do. It takes weeks, not months, and it directly supports the price you can defend.

The headline number is the least important part of the deal.

Two offers can show exactly the same headline price. One might put £1.8m in your bank account on completion. The other might put £1m in your account and attach the remaining £1m to targets you cannot fully control. These are not the same offer.

This is the single most common way that UK business owners lose value in a sale: not on the headline, but on the structure around it.

Four deal traps to watch for

Get deal-ready before they start asking questions.

Due diligence is where more deals wobble than at any other stage. Not because the business is bad, but because the evidence is slow, inconsistent, or hard to find. When buyers get nervous, they protect themselves by lowering the price or shifting risk onto you through indemnities and retentions.

The defence is preparation. If you can answer every question quickly and consistently, you keep momentum and you keep the price.

What belongs in your due diligence pack

• Last two to three years statutory accounts and your latest management accounts
• Monthly P&L, balance sheet, and a simple cash flow forecast
• Bank statements and any finance or hire purchase agreements
• VAT returns, PAYE records, and Corporation Tax computations and payment records
• Customer and supplier contracts, including key terms and renewal dates
• Leases and property documents
• IP evidence: registrations, assignments, software ownership, licences
• Shareholder records, any option schemes, and board minutes
• Insurance schedules: data protection, cyber, employer’s liability
• A plain-English summary of any disputes, claims, or regulatory issues

Common red flags that reduce value in founder-led businesses

• The founder holds all key client relationships, pricing calls, or delivery knowledge
• Management reporting is thin, late, or different every month
• Add-backs are large, unexplained, or change between documents
• Processes live in someone’s head, not written down anywhere
• One client accounts for more than 20 to 25 per cent of revenue
• IP assignments are missing, especially where contractors built systems or software
• Key staff have no retention agreements or are on informal arrangements

Small, targeted fixes in these areas can meaningfully change the risk perception and with it, the multiple a buyer is willing to pay.

Structure drives tax. Tax drives what you actually keep.

Before you agree heads of terms, you need to understand the tax and structuring implications of the deal, not after. The structure of a sale can mean the difference between keeping 75p in every pound and keeping 55p. That gap matters enormously.

Share sale vs asset sale: the key difference

• Share sale: the buyer acquires the whole company, including its history and liabilities. Sellers typically prefer this for tax efficiency and simplicity. Business Asset Disposal Relief (BADR) may apply.
• Asset sale: the buyer picks specific assets and leaves certain liabilities behind. Buyers often prefer this for clean risk management, but it can create additional tax and complexity for sellers.

Business Asset Disposal Relief can reduce your effective Capital Gains Tax rate significantly, but the eligibility rules have conditions and must be checked properly, not assumed. Model your likely net proceeds before you agree a headline number. The headline is irrelevant until you know what you will actually keep.

Run a controlled sale. Do not let the buyer run it for you.

A buyer will naturally try to take control of the timeline, the information flow, and the pace of negotiations. That is not personal, it is just how buyers protect themselves. But if you let it happen, you end up reactive, rushed, and with fewer options than you started with.

A clean, seller-led process in five steps

1. Receive written terms

   No call, no meeting, no further information until you have a written outline from the buyer.

2. Share a teaser, then deeper information after NDA

   Stage-gate your information. The right detail at the right time, not everything at once.

3. Agree heads of terms

   Cover price, structure, earn-out rules, working capital basis, your post-deal role, and exclusivity length.

4. Run due diligence with clear timelines

   You set the pace. Respond quickly, consistently, and from a single source of truth.

5. Sign and complete

   With warranties, indemnities, and retentions agreed and a clear walkaway point if the deal shifts.

On exclusivity: keep it short and milestone-based

Buyers ask for exclusivity to protect their investment of time. That is reasonable. What is not reasonable is open-ended exclusivity with no progress milestones. Grant exclusivity for four to six weeks, with specific deliverables on both sides, and the right to withdraw if reasonable timelines are not met.