Selling my business

[cull24]

I am looking for some advice on selling my business. I have never done this before and the more research I do the more of a mine field it seems to be.
How do I value the business correctly?
Best ways to advertise it?
Would using a business broker cost a lot of money?
Legal expenses?
Any other areas I should be looking at?

 

[Lisa Thomas]

You will get different answers on here about valuing the business. Sometimes this is something the company's accountant might be able to hep with.

I can recommend an agent who can help - feel free to dm me for their details.

Do you have any employees - if so, TUPE might be an issue.

 

[cull24]

No it is a small one man business with lots of opportunity to grow and it’s been family run since 1864, so very well established.

 

[Lisa Thomas]

People won't pay for what it might be worth in the future, they will pay what it's worth at the time of selling.

 

[cull24]

I understand that but surely it’s a selling point.
I have improved the business year on year for the last 10 years which the accounts show.
But honestly I feel like I am at a dead end when trying to find a way to sell it.
I am having to sell due to health issues so physically can’t do my trade anymore.

 

[Paul Carmen]

Potential future growth is actually a negative point; the only question raised by that is "why haven't you grown it yourself if there is so much opportunity".

The business is worth what someone is prepared to pay for it, which could be nothing. This will be based on the future profitability, but also the type of business; e.g. what type of business is it, how many ongoing customers, what assets etc.

If it's effectively buying a job; e.g. the buyer needs to work in it themselves all the time, rather than employing people to do the work, then it's really only got the market value for the assets and any ongoing passive revenue streams. If it has no revenue streams, then selling the assets separately may raise the most money.

 

[NickGrogan]

Its had 160+ years to grow and has developed into a one man business.

I'm impressed its carried on that long, but you'll need a good reason why it can grow now when it never has before.

 

[Mark T Jones]

Given that you are climbing into a snake-pit, I'd certainly allocate cash for solid legal and financial advice.

Brokers - there are good & bad (as ever, the bad ones make the most noise) - general advice on buying any value service is to pay attention to those who ask challenging questions and manage your expectations, and run a mile from those who give exciting valuations and big promises. Oh, and don't sign any contract until you 100% understand what it means.

Buyers - the majority will be dreamers, chancers and the famous '£1 charlies' - Their questions and approach wil tell you which category they fall into.

Being realistic - what are you actually selling?

Hard assets
Goodwill? (Based on what?)
Contracts?
IP?

As has been mentioned, nobody in their right mind pays for potential (there are some buyers not in their right mind, particularly in hospitality) - That's their reward.

 

[Clinton]

How do I value the business correctly?

You don't. There's a strange assumption among small business owners that their business has value. It usually doesn't. It has value to them, sure, but not transferable value. That's especially true of one man bands.

The length of time the business has been around is irrelevant.

Good positions in Google are irrelevant.

Having satsified customers and good online feedback is irrelevant.

Not having debt is irrelevant.

Lots of opportunity is irrelevant (every single seller claims lots of opportunity. The naffness of this claim is off the scale).

Most of the other 'highlights' that vendors offer are all irrelevant!

What's relevant is how much net profit the business is going to generate, by itself, after the owner leaves. In your case, I take it the answer is ...nothing.

I am looking for some advice on selling my business. I have never done this before and the more research I do the more of a mine field it seems to be.

Not really. There is plenty of clear information on my site and you could start with this article and this article of mine to inject some reality into the whole situation.

Don't flatter yourself - no serious / competent business broker will take this on. If you still want to sell, it may be possible but you need to roll your sleeves up and spend a few days on the rest of the site (and other sites) learning about selling businesses. Then start looking for buyers yourself and when you find one, the price is going to be entirely what you can convince them to pay. It's not going to be based on any formula!

When (and if) you get to that point, don't forget to hire a good corporate solicitor to handle the documentation.

 

[Gettingthereslowly]

What industry/area are you in?
Approx yearly turnover?
Approx yearly profit?

(some small businesses are in reality just great 'jobs'; but not really saleable businesses ~ you might be lucky and find another likeminded person who wnats to buy a 'job' off you ~ think of window cleaning rounds. But if you have something special , unique, branded, it opens things up a bit)

 

[fisicx]

@cull24 - are you trying to sell you memorials business?

If so your only really hope is selling to one of your local competitors. They probably won't be interested in your showroom, vehicles or tools. All they will want is your orderbook and maybe your stock (at a knockdown price).

The website says you have a team of craftsmen but above you say it's a family business and then that you are a one-man band. Which is it?

 

[Pish_Pash]

People won't pay for what it might be worth in the future, they will pay what it's worth at the time of selling.

that's not how a market works - people are willing to tolerate high PE ratios for anticipated growth (look at Nvidia...a PE of 146 last year!)...the OP's problem is convincing any prospective buyer of that growth potential (& give a reason why he didn't go that way himself) ...but actually his main problem is that there aren't too many buyers who have enough dosh available to buy a one man business (in other words shell out a whole heap of money ....for a job)

 

[Clinton]

...people are willing to tolerate high PE ratios for anticipated growth (look at Nvidia...a PE of 146 last year)

You make the classic mistake of assuming that what works for large mega billion dollar corporations works for micro businesses as well.

It doesn't. The rules (and multiples) are very, very different.

Price is a function of return and risk. nVidia, like any megacorp, has a moat - it's not easy to build a competitor. It's far, far less of a risk than the OP's business. That affects price (and multiple).

Your average OMB has no moat. Anybody can start up a competing business at very little cost. When micro businesses do succeed in selling (about 5% of the time), they tend to attract prices of 1x earnings.

(look at Nvidia...a PE of 146 last year!)

LOL. You should try that sometime. "Here's my business making £100K in profit. It has fantastic potential. Give me 14.6 million for it."

 

[fisicx]

Nividia grew massively because bitbarn demand.

The business for sale here engraves gravestones. I doubt there is much opportunity for growth.

 

[Pish_Pash]

You make the classic mistake of assuming that what works for large mega billion dollar corporations works for micro businesses as well.

It doesn't. The rules (and multiples) are very, very different.

Price is a function of return and risk. nVidia, like any megacorp, has a moat - it's not easy to build a competitor. It's far, far less of a risk than the OP's business. That affects price (and multiple).

Your average OMB has no moat. Anybody can start up a competing business at very little cost. When micro businesses do succeed in selling (about 5% of the time), they tend to attract prices of 1x earnings.




LOL. You should try that sometime. "Here's my business making £100K in profit. It has fantastic potential. Give me 14.6 million for it."

It's not a classic mistake ...if a company (one man band or otherwise) is growing (i.e. as showing in annual accounts.... & forward projected growth) people will be prepared pay more for it (vs. its current earnings), which (by default) means the PE ratio for companies that are in a growth phase is always going to be higher.

Take two companies operating in the same field....

company A (a one man band) makes annual profits of £100k (and has done for the past few years)

company B (also a one man band) made an annual profit of £10k the first year £50k the second year, £100k the third year.

So both have current annual profits of £100k ...assuming 100 shares in issue ...so both see a Earnings per share that's currently exactly the same.

Are you going to bag both companies for the same price? Nope...not a chance....company B is demonstrating exponential growth ...and that's gonna cost you as a buyer (which means company B will sell for a higher PE Ratio vs company A)

PE Ratios aren't just for Publicly traded companies on the LSE etc....I used Nvidia to get a point across but you've leapt on it for the wrong reasons.

 

[Clinton]

Are you going to bag both companies for the same price? Nope...not a chance....company B is demonstrating exponential growth ...and that's gonna cost you as a buyer (which means company B will sell for a higher PE Ratio vs company A)

Company B likely WON'T sell as it's a job. It'll join the 95% of other such businesses going to market and failing to sell.

If the company were larger, not heavily dependent on the owner/s and showing growth in profit, buyers would factor in that growth, maybe!

In most cases, you'll find them arguing that valuation should be based on average profit over the last 3 years! They're a crafty lot, buyers.

In the unlikely event that they value based on projections, they'll expect the vendor to share the risk via an Earn Out (EO).

The buyer is not paying for "potential". He's paying for results and he'll pay when those results are actually delivered!

Further, he'll drag out DD and require monthly management figures during the DD period and, if there's the smallest dip in performance or churn rate or profitability or whatever during that time, he'll ask for all projections to be thrown out the window and for the price to be renegotiated. That's the reality of the market, like it or not.

I've been involved, in one way or another, with many, many such deals. Buyers accepting the seller's projections, and paying based on those projections, will demand to pay on results, not expectations.

These are, in fact, worse deals. Most EOs end in dispute!

 

[Justin Smith]

Company B likely WON'T sell as it's a job. It'll join the 95% of other such businesses going to market and failing to sell.

If the company were larger, not heavily dependent on the owner/s and showing growth in profit, buyers would factor in that growth, maybe!

In most cases, you'll find them arguing that valuation should be based on average profit over the last 3 years! They're a crafty lot, buyers.

In the unlikely event that they value based on projections, they'll expect the vendor to share the risk via an Earn Out (EO).

The buyer is not paying for "potential". He's paying for results and he'll pay when those results are actually delivered!

Further, he'll drag out DD and require monthly management figures during the DD period and, if there's the smallest dip in performance or churn rate or profitability or whatever during that time, he'll ask for all projections to be thrown out the window and for the price to be renegotiated. That's the reality of the market, like it or not.

I've been involved, in one way or another, with many, many such deals. Buyers accepting the seller's projections, and paying based on those projections, will demand to pay on results, not expectations.

These are, in fact, worse deals. Most EOs end in dispute!

I agree with much of what you say (unfortunately, because I am at the point I'd like to sell my small business ! ) but I am not sure I agree that Google ranking is not worth anything. A decent website with a high ranking must be worth something particularly for a mail order type business. Note : I have specifically said "mail order" rather than "online" because even now we still do about a third of our turnover to phone up orders. In fact if I count repeat orders it's probably more than a third.

 

[fisicx]

Google ranking and the associated website have almost zero value as they can be easily replicated.

 

[Nathanto]

Google ranking and the associated website have almost zero value as they can be easily replicated.

I guess it depends on your definition of "almost zero"!

Domain names with no website (but a good google ranking and quality backlinks) sell week in, week out for thousands. Every month the better ones sell for £xx,000 and every so often the best go for £100,000+.

 

[fisicx]

I guess it depends on your definition of "almost zero"!

Domain names with no website (but a good google ranking and quality backlinks) sell week in, week out for thousands. Every month the better ones sell for £xx,000 and every so often the best go for £100,000+.

That’s somewhat different and is unlikely to apply in this instance. Small local and niche domains aren’t worth much.

The sort of people who pay thousands for a domain name are fooling themselves. A domain without a website is very unlikely to rank for anything.

 

[Nathanto]

That’s somewhat different and is unlikely to apply in this instance. Small local and niche domains aren’t worth much.

I agree it's probably not relevant to the OP's situation but I think you're wide of the mark regarding local and niche domains in general. A domain with authoritative backlinks is still very valuable, even here and now in 2025.

The sort of people who pay thousands for a domain name are fooling themselves. A domain without a website is very unlikely to rank for anything.

While I completely understand you being sceptical, your beliefs don't reflect what's happening in the real world; there's a whole industry out there that specialises in monetizing domain names and they're making a small fortune out of it.

I've been half-heartedly tracking sales from just one particular auction site for the last three months and so I know for a fact that they've had over £600,000 in UK domain-only sales in that time. (The total amount may actually have been much more, there were many times when I didn't track that day's sales.)

 

[fisicx]

A domain with authoritative backlinks is still very valuable, even here and now in 2025.

Do you have an example of one of these?

Without a website the backlinks will have no value - Google may even disavow all those links.

there's a whole industry out there that specialises in monetizing domain names and they're making a small fortune out of it.

I agree. Mainly because there are a lot of suckers out there who believe the hype.

There are bazillions of domains - almost all of which are local or niche. They only have value if someone wants that exact match. But if you have 'littlepiddlecatpaws.co.uk' without a domain the chances of getting anything is virtually zero. Especially as I can register 'littlepiddlecatpaws.uk' for a tenner.

 

[Nathanto]

Do you have an example of one of these?

Without a website the backlinks will have no value - Google may even disavow all those links.

Purecornwall.co.uk was an expired domain that dropped a week ago and sold yesterday for £3,200.

SEO/Backlinks domain
Ahrefs DR:28 ~ Backlinks:1,232 ~ Ref.domains:378 ~ DA:20 ~ PA:31
Links from: bing.com, sapo.pt, thetimes.com, folkd.com, ispionage.com, coupontoaster.com,
busniessdirectory.com, anytimebooking.eu,

But if you have 'littlepiddlecatpaws.co.uk' without a domain the chances of getting anything is virtually zero. Especially as I can register 'littlepiddlecatpaws.uk' for a tenner.

That's missing the point, it's all about backlinks and your £10 littlepiddlecatpaws.uk won't have any backlinks.

If the previous owner of littlepiddlecatpaws.co.uk had done something to merit backlinks from say the RSPCA, Cat Protection League and Pets At Home then that has value to people who know what they're doing.

 

[Mark T Jones]

Google ranking and the associated website have almost zero value as they can be easily replicated.

In hard due-diligence term I'd agree with this and with Clinton

At this level, however emotion and perception play a big role and all sorts of things (including the dreaded 'potential') can have value

It does require finding the right buyer and presenting it well

 

[fisicx]

Purecornwall.co.uk was an expired domain that dropped a week ago and sold yesterday for £3,200.

SEO/Backlinks domain
Ahrefs DR:28 ~ Backlinks:1,232 ~ Ref.domains:378 ~ DA:20 ~ PA:31
Links from: bing.com, sapo.pt, thetimes.com, folkd.com, ispionage.com, coupontoaster.com,
busniessdirectory.com, anytimebooking.eu,

All those links pointed to the website. Once the domain expired Google will have started dropping them from the index. The domain peddlers don’t tell you this as it undermines their whole business model.

Google measures the value of a link and the relevance of source to target. Without a target page the link has zero SEO value.

 

[Nathanto]

Once the domain expired Google will have started dropping them from the index. Google measures the value of a link and the relevance of source to target. Without a target page the link has zero SEO value.

Think about it for a second, if what you say was correct then every time there's a major outage of some sort then masses of websites would fall out of Google rankings. You may argue that that is exactly what does happen however what you're forgetting is the backlinks from the third-party sites are still there and so as soon as the target web site is restored those links regain their value...

Every day people in the SEO industry can and do revive SEO benefits from domain names that have previously stopped pointing to a website; they do this by analysing backlinks and recreating relevant content.

The domain peddlers don’t tell you this as it undermines their whole business model.

You've got it the wrong way round. The industry isn't based around snake-oil salesmen pushing worthless domains via a hard-sell, practically all such domains are sold by auction so this is experienced business-savvy buyers choosing exactly which domains fit their specific criteria.

 

[fisicx]

The links don’t drop overnight. When Google re-indexes a site the links are reviewed. If the target site no longer exists the links are removed from the index.

If you now build a new site on the target domain unless the new pages and site structure exactly match the old the links become irrelevant.

And yes there is an SEO industry rebuilding websites but that’s not really what is being discussed here. The question was about the worth of a website if you are selling a business. And the answer is: not a lot. The goodwill, repeat customers, mailing lists and so on may get you a few bob but the actual website isn’t.

 

[Nathanto]

the old the links become irrelevant ... The goodwill, repeat customers, mailing lists and so on may get you a few bob but the actual website isn’t.

We'll have to agree to disagree as I'm sure would most of the buyers who last month alone bought over 100 expired domain names for hundreds if not thousands of pounds, particularly the half dozen people who paid over £10k each for a domain name with no website but loads of old quality backlinks ...

 

[ctrlbrk]

Another one of those threads where OP asked the question and hasn't been seen since then.

 

[Justin Smith]

Google ranking and the associated website have almost zero value as they can be easily replicated.

But if I sold my business the website (which, basically, is the business) would go with it.

 

[Justin Smith]

That’s somewhat different and is unlikely to apply in this instance. Small local and niche domains aren’t worth much.

The sort of people who pay thousands for a domain name are fooling themselves. A domain without a website is very unlikely to rank for anything.

My website doesn't get as many on it as it used to at the height of the digital switchover but even now it still gets about 8,000 sessions a month.

On that subject, how accurate is Analytics ? How many of those sessions are actually Bots ?

 

[fisicx]

On that subject, how accurate is Analytics ? How many of those sessions are actually Bots ?

Depends on the analytics system you use. But you need to look at the detail in the analytics. Look at the source, bounce, time on site, number of pages visited and for how long.

Good analytics will ignore the bots.

 

[Justin Smith]

Depends on the analytics system you use. But you need to look at the detail in the analytics. Look at the source, bounce, time on site, number of pages visited and for how long.

Good analytics will ignore the bots.

It's Google Analytics 4, and it reports 0 seconds on every page, so it's quite obviously inaccurate in at least one metric.

 

[fisicx]

It's Google Analytics 4, and it reports 0 seconds on every page, so it's quite obviously inaccurate in at least one metric.

It can mean they landed then left without going to another page. Other analytics have far better metrics. Try clicky.com

 

[Justin Smith]

Justin Smith said:
It's Google Analytics 4, and it reports 0 seconds on every page, so it's quite obviously inaccurate in at least one metric.

It can mean they landed then left without going to another page. Other analytics have far better metrics. Try clicky.com

There is no way that every visitor to my site :

1 - Only looked at the landing page then clicked off / bounced
2 - Spent so little time on the page it did not even register

I queried this with the chap who helps me with the (Wordpress) site but he said he was sure there was nothing wrong with the tracking code he put on.

* it's mainly very useful information with a sales section added on

 

[fisicx]

If Google analytics is reporting visitors along with landing page details everything is working. Install a different analytics package and compare. Look at the server data to check raw data.