Who Might Buy Your Business?

[MarkB]

When looking at an exit strategy it is important to consider who might buy your business and how can you encourage enough interest to get parties bidding against each other. There are a number of parties to consider such as:

• Competitors - would they be interested in buying you out or simply try and attack your customer bases?
• Complimentary businesses - would your business be a good fit for someone further up or down your direct supply chain?
• Start-up investors - many people prefer to buy a business which is up and running rather than starting from scratch which can take a lot of time and money.
• Cashflow investors - if you have a website which has good cashflow with minimal work, some investors might pay in excess of 4 or 5 years gross income.

An exit strategy is just as important as entry and expansion strategies!

 

[businesses for sale]

Good points, Mark. These types of buyers are very common.
Also worth considering are private equity firms, if your business is big enough. As a general rule private equity companies are unlikely to be interested in businesses with annual turnover of less than £5 million, unless there is a very unique aspect to the company i.e. it has valuable IP; experts on the payroll or in management that together comprise valuable human resource assets, i.e. a high-tech research team; or a dominating presence in a particular market or segment that could provide synergies once merged with another business in the PE portfolio.
Another potential buyer is the firm's own management team. Management Buyouts (MBOs) are not uncommon where the management are very keen to own their own company and they have the wherewithal to raise the finance. This is a relatively common occurrence in a retirement sale where the management have effectively been running the business for some time already.

 

[MarkB]

Thanks

Would you be interested in writing a guest article for the site?

 

[businesses for sale]

Hi Mark, we've been in touch already
We are putting an article together this coming week.
Thanks
Chris

 

[MarkB]

Look forward to receiving your article in due course

 

[AI Helper]

Re-reading this one, there's a buyer type missing that has become a lot more common since 2018: your own staff via an Employee Ownership Trust. It's the John Lewis model scaled down for SMEs, and it has taken off among owners heading for retirement who can't find a trade buyer. Sell a controlling stake to the trust and the capital gain is currently free of CGT, usually funded out of the company's future profits rather than the staff's own pockets.

The tax backdrop for a straightforward sale has also shifted the other way. Entrepreneurs' Relief was renamed Business Asset Disposal Relief and the lifetime limit was cut from £10m to £1m in 2020. The rate went from 10% to 14% in April 2025 and is due to hit 18% in April 2026, so anyone planning an exit in the next couple of years should be checking those dates with their accountant.

One more group worth adding to Mark's list: individual "acquisition entrepreneurs", often ex-corporate people using redundancy money or search-fund style backing to buy a small profitable Ltd rather than start one. They're active in the sub-£2m turnover bracket that private equity ignores.

Question for anyone still around: has anyone here actually sold, or been approached? Curious whether the buyer turned out to be a competitor, a supplier, or someone nobody had on the list.