Part 4 of 4: Getting Sale-Ready: Preparation and the Advice Every Seller Needs
This is the final part of our four-part conversation with Blaser Mills on the state of UK M&A, covering how to prepare for a sale in the next two to five years.
If a business owner is thinking about selling within the next 2–5 years, what should they do now?
Edward: To prepare for a sale within the next 2–5 years, a business owner should focus on several key areas to ensure the process runs smoothly and efficiently. As we said above first impressions count. If a buyer sees a well organised business and finds an issue, which they will, they will simply think, all businesses have issues. If they see a poorly organised business the reaction is more likely to be that any issue is just the “tip of the iceberg”.
Update the company’s records, including financial statements, tax returns, constitutional documents and minute books of directors’ and shareholders’ meetings. Ensure all necessary licences and permits are in place and valid and accessible.
Review and tidy up contractual arrangements. Document unwritten contracts, standardise terms for key agreements and ensure contracts with major suppliers, customers, agents, and distributors are up to date and that you have accessible signed and dated versions. Check key contracts for change of control clauses that allow termination if the business is sold.
Ensure any shareholder arrangements, such as shareholders’ agreements and matching Articles, are clear, up to date and properly documented.
Ensure you have a clear audit trail in terms of IP ownership. Ensure licences for intellectual property rights are valid and properly documented and renewal payments have been made.
Review employment contracts and service agreements for directors, senior management, and key employees. Make sure you have enforceable restrictive covenants for key personnel Document details of employee benefits, pension schemes, and incentive plans.
Settle any minor disputes and ensure any major ones are properly documented and that you have taken legal advice on them.
Establish clear structures and allocate responsibilities within the deal team to streamline the transaction process.
Geoff: Start with an honest, independent view of where the business stands today, not where you hope it stands. We always begin with a baseline valuation and a value-gap review, because you can’t meaningfully improve something you haven’t measured. That process nearly always surfaces two or three issues that would otherwise have come up as a surprise, and a discount, during a buyer’s due diligence eighteen months later.
In practice, the recurring themes are financial reporting that needs tightening, a management team that needs strengthening or simply needs to be visibly capable of running the business day-to-day, and revenue that’s too concentrated in the owner’s own relationships. None of these fix themselves in a few months; they need genuine time.
Having advised on more than 500 transactions now, the clearest pattern I see is this: the businesses that achieve the smoothest process and the best price are consistently the ones where preparation started two-plus years out, not the ones scrambling to tidy things up once a buyer has already shown interest. An early review costs very little. Going to market unprepared costs a great deal more – in price, in certainty, and often in stress.
“What is the one piece of advice you wish every seller understood before beginning a transaction?”
Edward: The one piece of advice every seller should understand before beginning a transaction is the importance of preparation, particularly in assembling an experienced team of advisors. Proper preparation ensures the seller retains control of the sale process and allows the sellers to “keep their eye on the ball” in terms of continuing to run a profitable business.
Treat preparation and disclosure as value drivers, not admin: get your house in order early (contracts, IP, employment, governance, financials) and disclose issues upfront, because surprises late in diligence are what kill price, drive re-trades, and force seller-unfriendly protections (escrows, deferred consideration/earn-outs, wider warranties/indemnities) in sub-£50m UK deals.
Geoff: Don’t wait until you’re ready to sell before you start preparing to sell – they are two completely different timelines. I’ve sat with owners who had a genuinely excellent business but only realised, partway through a process, that they hadn’t thought about what life actually looks like the Monday after completion. That’s not a legal problem or a financial one; it’s a personal one, and by the time a buyer is at the table, it’s too late to solve it properly.
The sellers who get the best outcomes, financially and personally, treat the sale as a project that starts two to five years before a buyer ever appears, not an event triggered by an unexpected approach. Understand what drives your value, fix what you can, build a business that doesn’t depend on you being in the room, and get proper advice early. It consistently makes the difference between a transaction you endure and one you’re genuinely proud of.
Essential Specialist Advice (Closing):
Although every transaction is different, both legal preparation and commercial readiness have become increasingly important in today’s market. Businesses that invest time in getting their legal affairs, financial reporting and growth story in order are typically better placed to achieve successful outcomes when the right opportunity arises.
As this discussion highlights, legal and commercial considerations are closely intertwined throughout any transaction. Working with advisers who collaborate from the outset can help business owners avoid unnecessary hurdles and put themselves in the strongest possible position to achieve a successful deal.
How We Can Help
If you are thinking about your exit journey and would like to find out more about how The MGroup Corporate Finance and Blaser Mills can help, please contact:
Geoff Pinder, Partner, The MGroup Corporate Finance: g.pinder@themgroup.co.uk
Edward Lee, Partner, Blaser Mills: edward.lee@blasermills.co.uk