Timing your exit
Why Now Is the Time to Sell Your Business
By Lee Smith · · 4 min read · Updated
As an entrepreneur, selling your business can be as much of an emotional decision as it is a financial one. Plenty of considerations can and should go into it, rather than just the size of the cheque being cut by prospective buyers. Timing is a crucial aspect too.
Editor's note, September 2026: this is our original 2020 article, kept for the record. Entrepreneurs' Relief has since been renamed Business Asset Disposal Relief and its rate has risen, and interest rates are no longer near zero. The 2023 update revisits the same four factors.
While pulling the trigger to sell or hold on is ultimately a personal decision, there are a few compelling factors for why now may be just as good a time as any to put your business up for sale.
1. Recessionary risks
2019 saw strong market performance despite being headlined by political and economic uncertainties, as well as rising trade tensions. With this backdrop, it still remains a seller's market overall.
The caveat is that markets tend to respond worse to bad news than they respond positively to good news. With the overarching issues still unresolved, a recession is not a far-fetched proposition. If history is any indication, buyers retreat into their shell until the dust clears, by which time earnings multiples have been pushed down by the prevailing fear of uncertainty. As a business owner, you can take advantage of the current level of acquisition multiples to enhance your return at exit.
2. Entrepreneurs' Relief
In the UK, Entrepreneurs' Relief enables business owners to pay less Capital Gains Tax when they sell. Provided owners meet the eligibility criteria, all capital gains on qualifying assets are taxed at 10%, which is a strong incentive to complete a tax-efficient exit. To qualify, entrepreneurs must be a sole trader or business partner and own the business for at least two years before selling.
3. Capital just raring to go
A 2018 study by Bain published that globally there is more than $1 trillion of dry powder (institutional capital that has not yet been deployed into committed investments) available to asset managers. In other words, buyers are on the hunt for attractive opportunities to allocate capital to.
In such an environment, putting a well-run business up for sale can attract significant interest, and a well-managed business can attract competing bids.
4. Cheap financing
After the 2008 crisis, interest rates were lowered to stimulate greater economic activity. At near-zero levels, there is only one way for these rates to go over the short to medium term. Cheap debt is great news for buyers, as it enables them to obtain financing at lower interest rates. That translates to greater appetite for your business, because buyers have less of their own equity at risk in each deal.
In summary
Hindsight is always perfect when it comes to timing entry and exit points in a business. But there are macroeconomic factors, current policies and other considerations that make now a great time to sell if you are ready to move on.
At Verdani Capital we offer fair business valuations whilst safeguarding employees and creating a legacy for founders. To find out more and get a valuation on your business, contact us.
Related reading: What your business is worth · How we buy