How to Sell Your Business: A Step-by-Step Guide for SME Owners

If you’re thinking about selling your business, you’re not alone. Many SME owners reach a stage where selling is the right next step; whether to retire, move into a new venture, or release capital after years of hard work.

But knowing what to do to sell your business, how long it will take, and what the process actually involves can feel overwhelming.

This guide sets out the step-by-step process of selling a business in the UK. It focuses on the seller’s perspective, showing you what to expect at each stage; from preparing the business for sale to post-completion tasks. We also explain, in plain English, the differences between a share sale and an asset sale, two common ways to structure the transaction.

We will give you clarity and confidence so you can make better decisions and avoid common pitfalls.

---

Step 1: Build Your Support Team

Selling a business is not something to go through alone. The very first step is assembling the right advisers around you. This will usually include:

Involving your team early pays off. They will help you decide whether to sell shares or assets, prepare your business for scrutiny, and avoid costly mistakes. Orbit Legal often works alongside accountants, banks and corporate advisers to provide joined-up support from the outset.

---

Step 2: Decide on Structure – Share Sale or Asset Sale?

Before marketing your business, you’ll need to consider whether the deal will be a share sale or an asset sale. You can read a detailed guide on the differences here: Share Sale vs Asset Sale: A practical guide for SME buyers and sellers

• What is a share sale? You sell your shares in the company. The buyer takes ownership of the company “as is”, with all its assets, contracts, employees, and liabilities.

• What is an asset sale? You sell specific assets and rights of the business (such as goodwill, premises, contracts, stock, IP, employees). You keep the company itself, including any assets or liabilities not agreed to be transferred.

Share sale vs Asset sale: High-level differences

Sellers often prefer a share sale for a clean break, while buyers sometimes push for an asset sale to avoid liabilities. We can help you weigh up which structure works best for you.

---

Step 3: Get the Business “Sale Ready”

Buyers will carry out detailed due diligence. To achieve a smooth process, and a stronger price, get your house in order first.

A “sale ready” business builds confidence and reduces the risk of price chips later. We will guide you on the level of preparation expected.

---

Step 4: Marketing and Initial Negotiations

Once you’re ready, you or your advisers will identify potential buyers. These might be competitors, suppliers, management teams, or private investors.

Early conversations focus on:

• Price expectations.

• Whether it will be a share or asset sale.

• Timetable.

• Any special conditions (such as key staff staying on).

  
  

Valuation approaches commonly used include EBITDA multiples, net asset value, or discounted cash flow forecasts. But remember: value is only part of the equation. The final price is influenced by demand, negotiation, and timing.

Your team will help you understand what’s realistic and stop you from committing to terms that create later legal or tax headaches.

---

Step 5: Heads of Terms, Confidentiality & Exclusivity

Once there’s a serious buyer, the first formal step is documenting the agreement in principle.

Key documents forming an agreement in principle for a business sale

These documents form the foundation of the deal. Vague or poorly drafted terms create disputes later, so it’s essential to have us draft or review them carefully.

---

Step 6: Due Diligence

The buyer will now investigate your business in detail. Expect questions across:

• Financial: Accounts, debts, forecasts.

• Legal: Corporate records, contracts, property, employment, litigation.

• Tax: Past compliance and potential liabilities.

• Commercial: Market position, customer concentration, competitors.

  
  

This process can feel intense for sellers. Being well-prepared speeds things up and avoids red flags.

Differences in share vs asset sales:

• Share sale: buyer checks everything (because they inherit everything).

• Asset sale: focus is narrower, limited to the assets being transferred.

We will manage the flow of information, handle disclosure, and protect you from overreaching requests.

---

Step 7: Negotiating the Main Sale Agreement

The buyer’s lawyers will usually prepare the main agreement:

• Share sale: Share Purchase Agreement (SPA).

• Asset sale: Asset Purchase Agreement (APA).

Both of these cover:

• Warranties: Statements you make about the business (accuracy of accounts, ownership of assets, no disputes, etc.).

• Indemnities: Specific protections for the buyer (e.g. known tax issues).

• Price mechanics: How the price is finalised. Under an SPA (in a share sale) the price may be finalised by completion accounts or locked box methodology; see Completion Accounts vs Locked Box: What’s the right price mechanism for your deal?

• Limitations: Caps, time limits, and thresholds to restrict your liability.

Negotiating these terms is critical. Our job is to limit your liability while keeping the deal on track.

---

Step 8: Supporting Documents

The main agreement is supported by a range of other documents, depending on the deal type:

Key documents prepared in a corporate sale

Asset sales often involve more paperwork, as each asset and contract must be transferred individually.

---

Step 9: Completion

Completion is the day the deal is finalised. Typically:

• Buyer pays the purchase price.

• Documents are signed and exchanged.

• Shares or assets are transferred.

  
  

In a share sale, completion is usually simpler: ownership changes hands in one go. In an asset sale, completion can be more complex, as multiple consents and transfers must be coordinated.

---

Step 10: Post-Completion

Even after completion, there are important tasks:

• Filings: Update Companies House records.

• Notifications: Inform HMRC, regulators, landlords, suppliers and customers.

• Integration: Transition employees, systems, and processes smoothly.

• Deferred payments: Monitor earn-outs or deferred consideration if part of the deal. See Earn-outs, explained

---

How Long Does It Take to Sell a Business?

One of the most common questions is: “how long does it take to sell a business?”

For an arm’s-length deal between unconnected parties, expect:

• 3 months: A small, straightforward sale.

• 6 months: Typical SME transaction.

• 9+ months: Complex businesses, regulated sectors, or where third-party consents are slow.

  
  

Asset sales often take longer than share sales because of the need to transfer assets and contracts individually.

---

Common Pitfalls

Seller pitfalls and impact during a corporate sale

---

Summary & Next Steps

Selling your business is a big decision. With the right preparation and advisers, it can be managed smoothly, leaving you with the financial return and peace of mind you deserve.

• Decide early whether a share sale or asset sale works best.

• Get your business “sale ready”.

• Secure Heads of Terms, confidentiality, and exclusivity properly.

• Work closely with your advisers to manage due diligence, negotiations, and completion.

If you are considering selling your business, we will guide you through the process and protect your interests every step of the way. Let's chat through your plans:

📩 info@orbitlegal.co.uk | 📞 0115 6777095 |

Disclaimer

This content is for general information only and doesn’t constitute legal, accounting, financial, or tax advice.  It’s based on the law of England & Wales and was correct at the date of publication, but the law and guidance can change.  Reading this page doesn’t create a solicitor–client relationship with Orbit Legal.  Please take advice on your specific circumstances before acting. Get advice for your situation by contacting Orbit Legal at info@orbitlegal.co.uk or 0115 6777095.