Scott Sands is a Partner and Head of the Corporate Law team at Slater Heelis Solicitors. He is an expert in corporate transactions, business succession and wealth structuring.  

What factors most influence the value of a business when it comes to sale?

Everyone’s initial response to this is looking at the profitability of the target business and applying a sector-related multiple, but the real influence comes from how closely buyer and seller expectations align. When there is a gap, earn-out structures are often used to bridge it, with the seller staying involved for an agreed period post-completion. These can be effective, but they carry risk if performance falls short, so it is important to find the right balance between upfront value and deferred consideration.

How does the type of buyer affect the sale process and timescales?

The nature of the buyer often shapes both price and pace. Trade buyers and private equity-backed groups are usually well funded and highly experienced, so they can offer stronger valuations, though the overall process can still take one to two years. Where the buyer is a management team or an employee ownership trust, funding is more limited, and transactions tend to involve more deferred payments. Developing management capability and securing finance can also extend the timetable.

What should business owners be doing well in advance to prepare for an eventual exit?

Early preparation makes a significant difference. A business that has not been reviewed with a future sale in mind can face delays, price reductions or even failed deals if issues arise during due diligence. Seeking professional advice well ahead of time allows potential problems to be identified and resolved before going to market. Although this involves some upfront investment, it is far more cost-effective than dealing with complications once a buyer is already engaged.