You’ve built a business from scratch, made it profitable and overcome countless obstacles along the way. With the hard work done and the company in good health, your focus may turn to the last big decision you will make as its owner: when to sell, and how to reap the rewards.
After putting so much into a company for so long, that decision is rarely simple, and the sale process itself is complicated and full of potential pitfalls. With careful planning, though, you can secure the exit you deserve.
Here are the five most common mistakes to avoid as you look ahead to life beyond the business.
What you'll find in this article
Selling a business is often the largest single financial event in an entrepreneur’s life, yet most preparation focuses on the deal itself and not on what the proceeds need to do afterwards. A business exit is not a single moment but a process: the point at which illiquid wealth tied up in a company becomes liquid capital that must then be preserved, structured and put to work.
This article sets out the five most common mistakes entrepreneurs make when approaching an exit: assembling the advisory team too late, misjudging the value of the business, not knowing their personal financial number, leaving the business too dependent on the founder, and waiting for a perfect moment that never arrives. It then covers how to prepare both the company and your personal finances for sale, what to do with the proceeds once wealth becomes liquid, and how a coordinated wealth management approach helps turn a one-off liquidity event into long-term financial security.
What is a business exit strategy?
A business exit strategy is the plan an owner puts in place for how, when and to whom they will eventually leave their business, and what happens to the wealth that leaving it creates. It sets out the intended route, whether that is a trade sale, a sale to private equity, a management buyout, passing the business to family, or winding it down, and the personal financial goals the exit needs to meet.
Good exit planning starts years before a sale, not months. The earlier you define the strategy, the more you can shape the business to be attractive to buyers, reduce founder dependency, organise clean financial records and align the eventual proceeds with your long-term plans. In the UK, exit planning also means thinking early about the tax position, the structure of the deal and what the after-tax proceeds will need to fund for the rest of your life.
For most owners, the exit strategy and the personal financial plan are two halves of the same decision. The five mistakes below are, in effect, the most common ways an exit strategy goes wrong.
Mistake #1: Not building the right advisory team early enough
There’s no golden rule when it comes to timing the assembly of your advisory team, but “sooner rather than later” is a helpful mantra.
Giving yourself the time to think about who you need, and where your blind spots are, will ensure you remain in control throughout.
Some key questions never change when tackling this crucial stage of the process: have the individuals you’re considering done this before? Have they worked in the same sector as your business, and do they have the knowledge and expertise to navigate challenges that are particular to your industry?
Above all, take the time to properly vet the people you plan to work with and make sure you’re comfortable with their approach. This is likely to be one of the biggest moments of your life as an entrepreneur, so it’s worth ensuring you fully trust the people you’re hiring to guide you and are confident in your ability to work together as you progress into the sale.
Mistake #2: Misjudging the value of your business
Approaching a sale might be the first time you’ve seen an outsider put a hard value on your business, and seeing a figure in black and white likely marks a significant milestone in your journey.
It’s important, though, not to get blinded (or blindsided) by the figure itself too quickly.
The first thing to do is to build a comprehensive strategy for each of the key areas of the business during and after the sale. This will help potential buyers see how the firm will continue to grow and build value after you’re gone.
Getting to the bottom of things can be difficult, so lean on your advisory team to help you get a sense of how other, similar firms are valued in the market, and seek an expert third party valuation.
Numbers often change. A valuation can depend on the firm that is assessing it, how they’re measuring the component parts and what the current market climate is. Crucially, too, the figure you receive initially may not be what you receive on transaction, but being prepared in good time will enable you to get as close as possible to your firm’s true value, and what you should be ready to accept, or not, as you continue in the process.
Mistake #3: Not knowing how much you need from the sale
This is the figure that’s personal to you. Your personal financial number is the amount you need to realise from a sale, after tax and costs, to fund your intended lifestyle and long-term goals for the years ahead.
Aside from the valuation of the business, you also need to be clear about what you stand to gain personally from any eventual sale, and whether it gives you the scope to achieve your next big adventure.
This is an ideal moment to reflect on life after the business, and many entrepreneurs run the risk of feeling adrift if they leave their plans until after they have already exited.
Consider what it is you want to do, what it will likely cost to put in place, and don’t forget to consider important factors around the edges such as tax, the effects of inflation, family circumstances and safeguarding your future finances. Holding proceeds in cash for too long carries its own quiet cost, so a plan for the capital matters as much as the number itself. Expert financial planners will be extremely useful here and can show you well in advance what you can achieve by being prepared ahead of time.
Consider an illustrative example. A founder sells for £8 million and assumes that is the figure that matters. After tax, transaction costs and any consideration deferred to future years, the amount that actually funds their life could be materially lower, and it is that net figure, set against the cost of the life they want, that determines whether the sale achieves their goals. (This example is used for illustrative purposes only: actual tax, costs and outcomes will vary.)
By working this through in advance, you will know what your minimum guidelines for a sale are, and give your hard-earned capital the best chance of sustaining you long into the future.
Mistake #4: Making the business too dependent on the founder
This is your company, and you built it from scratch. So, obviously you’re the firm’s most important person, right?
As surprising as it sounds, this can be a founder’s undoing when the time comes to say goodbye. Founder dependency is the degree to which a business relies on its owner for revenue, relationships or decision-making, and it is one of the first things a serious buyer will test.
However instrumental you’ve been in the building, running and growth of your business, an eagle-eyed buyer will want to see that the firm and its component parts have long since taken on a trajectory of their own.
No doubt the business already works effectively, and your team has been driving forward bigger and better objectives for success. But, like your personal financial plan, this is an opportunity to map out the “who, what and how” of the company’s long-term future when you’re no longer around to oversee the details.
Ensuring the very best leadership team are in place now (if they aren’t already) will give buyers a meaningful indication that you’ve got a long-term plan, and this will therefore work in your favour when it comes to securing a top-tier valuation.
It is also an opportunity for you to start the often-difficult process of emotionally detaching yourself from the company you’ve worked so hard to create.
Mistake #5: Trying to time the sale perfectly
Everyone wants to maximise the perfect sale price, but waiting for that “perfect” moment might mean you stay waiting forever.
It’s impossible to perfectly time any market, and the same goes for timing your sale. There will be a whole host of reasons why a particular moment will be more or less optimal to achieving your aims, but this is a chance to take stock and ask yourself what you most want to achieve.
Is there a baseline figure that you’re after? Do you have the team in place to help you? What might you be able to realise in a year’s time that you wouldn’t be able to realise now? These might be more useful questions to tackle than trying to pin down that elusive perfect moment.
How do you sell a business? The process in brief
Every sale is different, but selling a business in the UK usually follows a recognisable path. Understanding the sequence early helps you stay in control and avoid the mistakes above.
- Prepare. Get the business and your financial records in order, reduce founder dependency and assemble your advisory team.
- Value. Obtain an independent valuation and build the growth story a buyer will pay for.
- Go to market. Identify and approach potential buyers, usually through a corporate finance adviser or broker, while protecting confidentiality.
- Negotiate heads of terms. Agree the headline price and key deal terms in principle.
- Due diligence. The buyer examines the business in detail, which is where clean records and low founder dependency pay off.
- Complete and plan for the proceeds. Sign, complete, and turn attention to tax, liquidity and what the capital now needs to do.
Preparation is not a formality. Industry estimates suggest that around half of business sales which reach the due diligence stage still fail to complete, often because of problems that only surface once a buyer starts to dig. The steps that create or destroy value tend to happen long before completion, which is why preparing early matters more than timing the market perfectly.
How should you prepare a business for sale? A checklist
Before taking your business to market, it is worth checking that both the company and your personal finances are ready. A buyer will scrutinise the quality, reliability and transferability of the business, while you need to understand what the sale means for your own long-term position. Some of these points expand on the mistakes above; others are new.
- Understand the value of the business. Seek an independent valuation that reflects revenue, profitability, growth prospects, customer concentration, intellectual property and management depth.
- Prepare your financial records. Clean, accurate and well-organised accounts make a major difference in due diligence, where buyers need confidence the numbers are complete and reliable.
- Reduce dependency on the founder. Show that leadership, client relationships and decision-making can continue successfully after you step away.
- Build the right advisory team. Bring together corporate finance advisers, accountants, tax specialists, lawyers and wealth managers early in the process.
- Know your personal financial number. Be clear on how much you need from the sale to support your future lifestyle, family goals and long-term security.
- Plan for tax and liquidity. The headline price is not what you keep: tax, transaction costs, deferred payments and earn-outs all affect the final outcome.
- Think about life after exit. Plan ahead for investing the proceeds, supporting family, philanthropy, future ventures or retirement.
What should entrepreneurs do after selling a business?
After selling a business, entrepreneurs often face a very different financial reality. Wealth that was previously tied up in the company may become liquid, creating new opportunities as well as new responsibilities.
The first step is usually to pause before making major decisions. A business sale can be emotional, and it may be tempting to invest quickly, make large purchases or commit to new ventures. Taking time to build a clear post-sale plan can help protect the proceeds and align them with your long-term goals. We cover this stage in more depth in our guide to what to do with the money after selling your business.
Important areas to consider after a business sale include:
- How much cash to keep available
- How to invest the proceeds
- How to generate future income
- How to manage tax efficiently
- How to support family members
- Whether to start, buy or invest in another business
- How to preserve wealth over the long term
- Whether philanthropy or legacy planning should form part of the plan
For many entrepreneurs, the challenge after exit is no longer how to grow the business, but how to manage, protect and structure the wealth created by it. For those with the appropriate risk appetite, a liquidity event can also open access to asset classes that were previously out of reach, including private markets.
How much tax do you pay when selling a business in the UK?
Cadro is not a tax adviser, and this section is general information rather than tax advice. The figures below are correct for the 2026 to 2027 UK tax year at the time of writing, but tax depends on your personal circumstances and the rules change. Confirm your position with a qualified tax specialist or HMRC before you act.
For most people, selling a business, or the shares in their company, is a disposal for Capital Gains Tax (CGT). Since 6 April 2026, gains that do not qualify for a relief are taxed at 18% within the basic rate band and 24% above it, after deducting the annual tax-free allowance, which is £3,000 for the 2026 to 2027 tax year.
Many business owners can reduce this through Business Asset Disposal Relief (BADR), formerly Entrepreneurs’ Relief. Where a disposal qualifies, gains are taxed at 18% from 6 April 2026, up from 14% in the 2025 to 2026 tax year and 10% before that, subject to a £1 million lifetime limit on qualifying gains. Qualifying generally requires that, for at least two years before the sale, you have owned the business, or held at least 5% of the shares and voting rights in a trading company of which you are an employee or officeholder. The detailed conditions are strict, which is another reason to take specialist advice early.
The wider planning point is that the headline price is rarely what you keep. The structure of the deal, how and when the consideration is paid, the reliefs available and your other income in the year of sale can all change the final, after-tax figure. That net number, not the headline, is the one that should feed the personal financial number discussed above.
How can Cadro help?
These simple steps are far from an exhaustive list, and there are likely to be many challenges along the way as you approach the sale of a business.
If you are considering selling your business, preparing early can make a significant difference.
Cadro helps entrepreneurs think beyond the transaction, from understanding their personal financial number to planning how sale proceeds can support long-term goals through coordinated advice, transparent reporting and technology in one place.
Speak to the Cadro team to start planning for life before, during and after a business exit.
FAQs about planning a business exit
What is a business exit strategy?
A business exit strategy is your plan for how, when and to whom you will leave your business, and what happens to the wealth that leaving it creates. It covers the route, such as a trade sale, a sale to private equity, a management buyout or family succession, and the personal financial goals the exit needs to meet.
When should I start planning my business exit?
As early as possible, ideally years before a sale. Early planning gives you time to make the business more attractive to buyers, reduce founder dependency, organise financial records and align the eventual proceeds with your long-term financial plan.
How long does it take to sell a business?
The time it takes to sell a business varies significantly with the size, complexity and attractiveness of the company, but UK brokers typically cite six to twelve months from going to market to completion. Some transactions complete faster, while others take longer, especially where due diligence, negotiations, financing or regulatory issues are involved. Well-prepared businesses with clean financial records tend to sell more quickly.
How do I know what my business is worth?
A business valuation usually considers factors such as revenue, profitability, growth potential, assets, market conditions, customer concentration, management strength and comparable transactions. A professional valuation can help provide a more realistic view before entering negotiations.
Why is exit planning important for entrepreneurs?
Exit planning helps entrepreneurs prepare both the business and their personal finances for a potential sale. It can improve the quality of the business, reduce risks for buyers, support better negotiations and help the owner understand what the sale means for their future wealth.
Who should help me when selling my business?
Entrepreneurs often work with a team of advisers when selling a business, including corporate finance advisers, accountants, tax specialists, lawyers and wealth planners. Each adviser plays a different role in helping prepare, negotiate and complete the transaction.
What should I do with the money after selling my business?
After selling a business, it is important to create a plan for the proceeds. This may include holding cash, investing for long-term growth, generating income, managing tax, supporting family members, planning for retirement or funding future business ventures.
Disclaimer: This article is intended for informational purposes only and does not constitute investment advice or a recommendation to engage in any investment activity. It does not take into account the investment objectives, financial situation or particular needs of any individual. Capital at risk. The value of your portfolio can go down as well as up and you may get back less than you invest.
