Selling a business the Hilton Smythe way - Hilton Smythe.

Selling a Business – Common FAQs Answered

Thinking about selling your business?

Selling your business might be the most pivotal moment in your professional career, and our expert sales executives are here to guide you through the process. We’ve answered the most common questions about selling a business to help you get started.

Whether it’s exit planning, due diligence, transparent valuations, marketing, targeted buyer research and deal negotiation – we are proud to help with it all. 

Simplify the journey, maximise your value and achieve the successful exit you deserve.

Preparing for the sale of a business

What documents do you need to sell a business?

When you sell a business, you are required to have certain legal documents to prove that you own the business and set out the terms of the sale. These documents include:

  • Purchase and sales agreements that cover the terms of the sale

  • Lender documents

  • Lease agreements that need to be assigned to the buyer if the office space or any equipment is rented

  • Bill of sale, which transfers business assets to the buyer

  • Non-compete agreements

Do you need a business broker to sell a business?

While it isn’t a legal necessity to have a business broker sell your business, the process can be very lengthy and complicated without one. Business brokers can provide you with their knowledge and expertise every step of the way. 

Business brokers can also help by providing contacts from a variety of different sectors which saves you time looking for solicitors, accountants and so on. 

Head over to our guide on using a Business Broker for more information on how they could help you.

Do you need a solicitor when selling a business?

When you’re selling a business, there are many complicated legal procedures that arise that you may be unfamiliar with. This is where the help of a solicitor can be invaluable. There are a number of different benefits to using a solicitor, including:

  • Identifying the assets and liabilities to be sold
  • Drafting warranties, indemnities and disclosure
  • Exchanging ongoing supplier and customer contracts
  • Resolving IT and IP issues, such as websites and trademarks

The impact that a legal professional can have goes much further than what is listed above and there are many processes that are affected by a legal issue in one way or another.

Do you need an exit strategy before selling a business?

Yes, it is essential that you have an exit strategy before you sell your business. They help to plan for the probable and the improbable, providing you with a plan to exit your business with minimal fuss. It’s best to plan your exit strategy as soon as possible; allowing 3-5 years to start lining things up before actually putting the business up for sale is a good place to start. 

Not having an exit plan means you will find yourself making things up as you go along, and you leave yourself open to a variety of risks.

How long does it take to sell a business?

How long it takes to sell a company really varies from business to business. We have had sales complete within days and some that have taken years to complete. 

However, on average, we work to a timeframe of 6 – 12 months.

How do you know if the market is right for selling a business?

Market forecasting is a great way to know if the market is right for selling your business.Our business valuation calculator also factors in current market value, so you can use this (and input some of your own data) to help you understand what your business could be worth before deciding to sell.

How is a business valued for sale?

There are two methods that are used when valuing a business for sale:

  • Value your business with the Multiple Method – This is one of the most common methods used to value a business, and it works by determining market values for similar companies which can then be used as ratios to compare your own company to.
  • Value your business using EV/EBITDA – Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) works with the business’s operating profit or net profit before any tax or interest charges are deducted.

    Depreciation and amortisation are accounting concepts that allow the writing off of tangible and intangible business assets on the balance sheet. These assets are then broken down to represent an annual cost of the particular asset based on its perceived operating life. 

You can use our EBITDA valuation calculator to start.

Gareth Smyth

Our services if you turnover more than £1M

There comes a point at which every business owner considers their exit from the business. Our Business Advisers offer a Director led approach throughout the sale journey.

Lets start your journey
Katie Holt

When is the right time to sell your business?

Timing is everything when selling a business. Get the timing wrong and you may lose potential value when you sell. Get it right and you could be off into the sunset with your hard earned cash in the bank.

Timing is everything
Selling a business

Are you ready to sell your business?

Most business owners who decide to sell their business, are simply not ready to sell. Making sure you have everything in check before you instruct a broker is critical.

Ready to sell?

Costs of selling a business

What tax do you pay when selling a business?

When you sell a business, it’s important to understand the tax you pay. This tax will comprise of:

  • Capital Gains Tax 
  • Business Asset Disposal Relief 
  • Potentially, Corporation Tax

Who pays Capital Gains Tax when selling a business?

You will pay Capital Gains Tax if you’re a self employed sole trader or in a business partnership and you make a profit (gain) when you sell all or part of a business asset. 

Business assets you may need to pay tax on include:

  • Land and buildings 
  • Fixtures and fittings 
  • Plant and machinery 
  • Shares 
  • Registered trademarks 

Who pays legal fees when selling a business?

Both the buyer and the seller are responsible for paying legal fees when selling a business, since they will both need to hire their own solicitors.

Finding the right buyer for a business

Where do you list a business for sale?

You can sell your business through our business selling services. We can help to list your business on the most appropriate sites and to the right people, focusing on your key buyer targets.

You can use our free valuation calculator to get an instant business valuation in just 3 simple steps; this will help you to get started with the process, or allow you to decide if the timing is right.

How do you find legitimate buyers for a business?

Using business brokers, such as ourselves at Hilton Smythe, is a great way to find legitimate buyers for your business when planning to sell. We can look for prospective buyers who will have the right funds to purchase your business, as well as deal with enquiries professionally, set sensible purchase prices and finish on sensible sale prices. 

Take a look at our guide on making your business more attractive to buyers for more tips on finding legitimate buyers. 

What questions should a seller ask a buyer when selling a business?

There are a few questions you should consider asking a buyer when you’re selling a business. Listed below are the first 4 questions we always recommend asking:

  1. Why are you interested in buying the business?
  2. What are your plans for the business?
  3. How will you go about your due diligence process?
  4. How will you finance the purchase?

What documents do you need to show a buyer of a business?

When you’re collecting information, you should try your best to organise information into categories, including everything the buyer will want to see. These document categories include:

  • Corporate structure and records
  • Share capital and shareholders
  • Accounts
  • Finance and banking
  • Contracts and trading 
  • Assets 
  • Intellectual property
  • Insurance 
  • Consents and compliance 
  • Employment
  • Real estate 
  • Health and safety 
  • Tax

The above is the bare minimum of what is expected in a due diligence process and some categories may change as the transaction progresses. 

What happens once a business is sold?

If you continue to be involved with the business, you will retain any responsibilities and liabilities that are associated with the role.You will also have other tasks to complete, even if you choose to have no further involvement with the business. This could include informing staff and customers about the sale, informing HMRC and Companies House that you have sold the business and completing tax and VAT returns.

Find out the value of your business in under 60 seconds

Use our Business Valuation Calculator to get an instant business valuation in just 3 easy steps.

  • Less than 1 minute to complete
  • Answer a few simple questions
  • Get your FREE instant valuation
Why choose Hilton Smythe to sell your business

If you don't like the truth, we're probably not right for you. We will tell you how it really is and get the job done.

Access our database of tens of thousands of active, registered buyers.

We truly market your business for sale in all of the right places aimed at getting results.

What our customers say…

Reputation is driven by you

We believe our reputation to be of the up-most importance. We collect reviews from Feefo* and Google Reviews* and the majority of our reviews are five stars, demonstrating that we offer a stellar service from start to finish.

*Some reviews are edited for brevity and spelling/punctuation. All are currently live on Feefo and Google Reviews.

Feefo Google Reviews
  • They helped me the whole way

    “Not easy selling a restaurant during a pandemic but we got there in the end, Hilton Smythe were there seeing me through the whole process, they were friendly, easy to talk to and great at guiding me through.”

  • First class

    “I cannot thank them enough. I have nothing but praise for everyone at Hilton Smythe, they were there every step of the way to guide me through a difficult sale.”

  • Extremely efficient from start to finish

    “Paul dealt with our business sale then Karen Currie pushed the sale forward, keeping us informed of every step daily. Very impressed at their professionalism and friendly, efficient manner. Would highly recommend.”

  • Very professional service

    “Help and advice on hand for anyone starting out on a new venture fully recommended.”

  • Amazing company

    “Rob was great at the start then passed onto Kate which she took to another level. Only had my best interest at heart and worked very hard to close the deal. I can't explain how happy I am that I sold my business thanks to you guys.”

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