Business Sales & Exits Glossary

Owners may propose adjustments for exceptional professional fees, personal expenditure or unusual income. Buyers will test whether each item genuinely disappears after acquisition. Unsupported additions can damage confidence, so present the original figure alongside a clear adjustment schedule and supporting records.

Owners should review the teaser for indirect identification as well as accuracy. A distinctive location, customer combination or specialist product can reveal the business even without its name, so balance buyer interest against confidentiality before approving wider circulation.

Owners of businesses with property, equipment or substantial stock may find this approach useful alongside earnings analysis. Clarify whether assets are valued within a continuing operation or separately, and whether goodwill is included, rather than simply adding asset values to an earnings-based price.

Owners should explore exactly what the buyer wants to retain and integrate, including the brand, systems and management structure. The strategic fit may support negotiations, but integration plans can affect your future role and any earn-out calculation based on the acquired business's separate performance.

Owners should provide an equipment register and explain upcoming replacement needs before relying on EBITDA to support value. Deferring necessary investment may improve short-term cash but lead a buyer to reduce its offer when it identifies the spending required after completion.

Buyers will question profits that consistently remain tied up in debtors, stock or unfinished work. Owners should prepare a bridge from earnings to cash and explain seasonal movements, growth investment and collection patterns rather than assuming profitable accounts demonstrate readily available acquisition funding.

For an owner, this wording does not itself explain the final cheque. Establish which cash is credited, which liabilities are deducted, how working capital is measured and whether balances must be settled before completion or through the purchase price calculation.

Owners should distinguish the basket from any minimum size for an individual claim and check which obligations it covers. A deductible basket and a tipping basket can create different financial outcomes, even when both are described using the same threshold amount.

Owners should support growth claims with customer evidence, market knowledge and realistic delivery plans. Buyers may examine renewal behaviour, competitive alternatives and customer concentration, so distinguish opportunities already supported by demand from aspirations requiring substantial new investment or capabilities.

Owners should ask what the comparison actually measures and whether the published price includes deferred payments or assumed debt. A sale involving a larger, faster-growing or strategically important business may provide context without supporting the same multiple for your company.

Owners should agree accounting policies, preparation responsibilities, deadlines and dispute procedures before signing. The final adjustment can move proceeds after ownership has passed, so check sample calculations and ensure the seller retains suitable access to records needed to review the buyer's proposed figures.

Owners should review important customer, supplier, property and licence agreements before selecting a transaction structure. A share sale may avoid transferring the contract itself but still trigger change-of-control terms, while an asset sale may require assignment, novation or a replacement agreement.

Owners should present concentration by customer and explain contract terms, relationship history and profitability rather than supplying revenue percentages alone. A large dependable customer may differ from a short-term project client, but the buyer will still assess the consequences if that relationship changes.

Buyers may seek deductions for unpaid transaction costs, certain overdue liabilities or financing arrangements. Owners should request an itemised explanation and check whether each amount is already captured in working capital or earnings, because inconsistent treatment can reduce proceeds twice.

Owners effectively accept exposure to the buyer after handing over control. Check payment dates, interest, security, guarantees and any rights to deduct claims from instalments, and consider the buyer's ability to pay rather than valuing future payments identically to completion cash.

Owners using this method need credible forecasts for investment, working capital and trading performance, not simply ambitious profit targets. Buyers will test the assumptions, particularly the discount rate and continuing value, because small changes can materially alter the resulting valuation.

Owners should expect detailed questions and evidence requests rather than rely on the information memorandum alone. Organising records and allocating responsibility for answers can reduce disruption, while early disclosure of known problems gives more opportunity to resolve them before they threaten confidence or timing.

Owners should assess how much control they retain over the result and whether the buyer can change costs, strategy or customer allocation. Negotiate accounting rules, information access and dispute procedures carefully, because a headline earn-out amount may never become payable.

An owner should not treat enterprise value as the amount arriving in their bank account. Ask for a bridge to equity value that identifies debt repayment, qualifying cash, working capital adjustments and other agreed items before comparing offers or planning personal proceeds.

Owners should assess the new investment independently of the sale price, including voting rights, dilution, debt ranking and exit provisions. The headline value assigned to rollover shares is not cash, and future returns may depend on decisions controlled by other shareholders.

Owners need to distinguish total equity value from the amount payable to them personally and immediately. Different shareholdings, deferred payments, retentions and transaction expenses can alter the cash received, even where the overall price for all shares has been agreed.

Owners should establish who holds the funds, when they are released and what happens if a claim is disputed. Agree whether only the disputed amount remains held and how interest, fees and unresolved claims are handled so that proceeds are not unnecessarily inaccessible.

Owners should understand the investor's return expectations, funding structure and intended ownership period. The buyer may want management continuity or seller reinvestment, so discuss future involvement, governance and eventual exit plans alongside the price offered for the current transaction.

Owners should prepare reconciliations between statutory accounts, management figures and information supplied to buyers. Expect challenge to profit adjustments and balance-sheet classifications, because findings may influence both the headline valuation and the calculation of the final amount payable for the shares.

Owners should build forecasts from identifiable drivers such as customer demand, capacity, pricing and recruitment plans. Show the cash consequences of growth and explain downside scenarios, because buyers will question projections that assume rising sales without the investment or working capital needed to deliver them.

Owners should demonstrate how customer loyalty, reputation and operating systems transfer to a buyer. If these depend mainly on you personally, the buyer may question their durability or request a longer handover rather than accepting an unsupported amount described as goodwill.

A buyer will examine whether your gross profit is repeatable across products, customers and periods. Owners should explain changes in purchasing costs, pricing and cost classification, because shifting expenditure between direct costs and overheads can make comparisons misleading without changing total profit.

Owners should negotiate duties, availability, authority and payment separately from assumptions about the sale price. Define how support ends and whether it interacts with an earn-out, because an apparently complete exit can otherwise become an open-ended obligation to solve problems without clear control.

Owners should compare more than headline prices at this stage. Ask buyers to specify enterprise or equity value, completion cash, deferred elements, funding conditions and required owner involvement so that apparently attractive proposals can be assessed on a consistent basis.

Owners should treat this document as a supported commercial account, not a promotional brochure detached from the records. Reconcile financial information, distinguish facts from forecasts and explain material dependencies, because contradictions discovered later can weaken offers or prolong due diligence.

Owners should ask for a payment schedule that distinguishes gross price, completion adjustments and actual cash transferred to them. Repayment of company debt, adviser costs or sums held back can make the headline initial consideration different from immediately available personal funds.

Owners usually gain greater price certainty than under completion accounts, but must understand the leakage rules and maintain the agreed operating discipline. Buyers will investigate the reference accounts, while any permitted payments and compensation for the period to completion should be settled clearly in advance.

Buyers use these reports to understand current trading between statutory reporting dates. Owners should reconcile them to annual accounts, explain estimates and maintain consistent treatment of stock, accruals and income so recent performance can be assessed without repeated corrections or unexplained gaps.

Owners should assess the incoming team's operating experience as well as its financing. Because the buyers do not already run the business, they may need more support understanding customers, systems and sector-specific demands, which can influence both handover requirements and transaction risk.

Owners may value continuity and a buyer already familiar with the business, but management's ability to fund the price needs early testing. Consider deferred payment exposure, information conflicts and how the business will operate if negotiations fail while the team remains in place.

Buyers will assess who can run the business when you leave and whether responsibilities are genuinely delegated. Owners should show practical evidence of management performance, not only an organisation chart, and explain any recruitment or development still required to support continuity.

An owner should review the proposed net debt schedule early, including borrowing, hire purchase and balances with shareholders. Items that look like normal trading liabilities in the accounts may receive different treatment in the deal, materially changing the amount shareholders receive.

The key owner question is what profit remains when the business operates without your personal concessions or involvement. A buyer may replace your remuneration with a commercial management cost, adjust related-party rent or remove temporary income when assessing sustainable earnings.

Owners should show buyers how backlog converts into revenue, profit and cash over time. Distinguish firm orders from quotations and framework opportunities, and identify low-margin commitments or delivery constraints so the buyer can judge the quality rather than simply the size of the order book.

Owners should identify responsibilities that cannot currently be transferred and build practical alternatives before approaching buyers. Delegating customer relationships, documenting processes and strengthening management can reduce transition risk, while an unresolved dependence may lead to longer handover demands or more contingent payment terms.

Owners approached as a potential platform should test whether their team, systems and personal ambitions match the buyer's expansion plan. Discussions may involve continuing leadership and reinvestment rather than an immediate full exit, so separate the sale decision from the proposed future investment.

Owners should model the adjustment using realistic balances before accepting the pricing basis. Separate mechanical movements from buyer attempts to renegotiate value, and ensure definitions, information rights and dispute procedures are clear enough to calculate the outcome after control has passed.

Owners should examine the proposed management arrangements, acquisition borrowing and any requirement to retain an investment. Understand who controls key decisions and how returns are distributed, particularly if you remain a minority shareholder whose eventual proceeds depend on a future group sale.

Owners should show buyers where margins are earned and why they change. A rise driven by better pricing may carry different implications from a temporary reduction in maintenance or marketing expenditure, particularly if the buyer must restore those costs after completion.

Owners should establish who will provide the money, which entity must pay and what approvals remain outstanding before granting exclusivity. A lender's expression of interest is different from committed finance, while visible cash may still be restricted or allocated to another purpose.

Owners should be ready to explain where profit comes from and whether it will continue after sale. A clear earnings bridge, supported adjustments and evidence of customer collections can make discussions more productive than defending an unexplained headline EBITDA number.

For owners, a retention delays access to proceeds and may introduce buyer credit risk. Understand its purpose, release timetable and claim procedure, and consider whether an independently held escrow or other protection would better address the concern without leaving payment entirely within the buyer's control.

Buyers use revenue to understand scale, growth and customer demand, but owners must explain what sits behind the total. Separate repeat business, contracted income, exceptional projects and pass-through charges so that a purchaser can judge the durability and profitability of sales.

Owners can use a readiness review to prioritise issues that might delay a sale or weaken negotiating confidence. Not every weakness needs eliminating, but understanding it allows better timing, clearer disclosure and a reasoned decision about whether preparation should precede buyer approaches.

Owners can strengthen negotiations by identifying credible buyer-specific benefits and approaching suitable acquirers. However, the buyer may retain most of the expected benefit or discount integration risk, so evidence of synergies supports a discussion rather than creating an entitlement to a higher price.

Owners should avoid assuming that every bank balance is freely extractable. Customer deposits, restricted accounts, seasonal payments and minimum operating needs may affect the analysis. Agree the treatment alongside working capital and debt so that the same cash requirement is not counted inconsistently.

Owners should consider the buyer's strategic rationale and the sensitivity of information shared during discussions. A trade buyer may identify synergies that support its offer, but it may also intend to integrate operations or change the brand after completion.

For owners, negotiating the multiple without agreeing the underlying earnings can be misleading. Ask whether an offer uses historic, current or forecast performance and whether it produces enterprise or equity value. Deal structure and payment certainty also affect the offer's practical worth.

Owners may use this work to identify inconsistencies, anticipate buyer questions and address problems before exclusivity. Agree the scope, intended audience and reliance arrangements carefully, since a report prepared only for internal readiness may not provide the assurance a buyer or lender requires.

Owners become creditors as well as sellers and should assess the borrower's repayment capacity carefully. Understand whether acquisition lenders rank ahead of you, whether payments can be blocked and what enforcement rights exist if the buyer's business plan does not generate expected cash.

Owners can reduce repeated requests by maintaining a clear index, consistent file names and a managed question process. Restrict especially sensitive information to appropriate recipients, remove unnecessary personal information and keep track of versions so that different buyers do not receive contradictory records.

Buyers generally expect enough working capital to continue normal trading after completion. Owners should understand the agreed definition before collecting debts unusually quickly, delaying suppliers or reducing stock, because those actions may affect the purchase price or create operational problems.

Owners should test the target against seasonality, growth, payment cycles and unusual periods rather than accepting a simple average automatically. A poorly chosen target can reduce proceeds even when the business has continued trading normally up to completion.