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The 3 Biggest Problems SME Business Owners Face When Selling
31 July 2025
Accounting & Compliance, Building a Business, Cloud Accounting, Selling a Business
Selling a business is a major milestone but it rarely goes as smoothly as owners expect.
After 30 years helping small businesses grow and exit (including my own), I’ve seen the same issues come up time and again.
Most SME owners assume that when they’re ready to sell, the business will be too.
They focus on the positives but often overlook the key issues that, ironically, make small businesses harder to sell than larger ones.
So, what are the key challenges when selling a business? And how can you overcome them?
Here are the top 3 obstacles to a successful sale, and a practical 5-step plan to help you get your business ready (and valuable) for when the time is right.
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Messy or Incomplete Financials
Buyers want clean, accurate books. If your accounts are outdated, unclear, or missing key details, it raises red flags.
This can lead to delays, reduced valuations—or the deal falling through altogether.
Tip: Get your finances in order at least 12 months before you plan to sell.
That means up-to-date accounts, clear profit margins, and separating personal and business expenses.
That last point is a big one.
For example, if you put a personal £2,000 expense through the business, it might save you £800 in tax—but now you’ll need to convince a buyer that the expense wasn’t necessary.
You’re effectively saying: “Trust me, the real profits are £2,000 higher.”
In a business valued at 5x earnings, that one entry could cost you £10,000 off your sale price.
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Poor Preparation for Due Diligence
Due diligence is the buyer’s deep dive into your business—especially the numbers.
Many small business owners underestimate this process.
Scrambling to find documents during a deal is a common (and costly) mistake.
Tip: Conduct a mock due diligence now.
Organise key documents like contracts, leases, tax filings, employee records, and insurance.
Fix anything that’s missing or out of date before the real process begins.
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Overdependence on the Owner
If the business can’t run without you, buyers will hesitate.
They’re looking for something stable, where value doesn’t walk out the door when you do.
Tip: Build systems and delegate.
Empower a second-in-command or key team members to take over day-to-day responsibilities.
Speak to your advisors about how to retain key staff—this could include share options, growth shares, strong contracts, or profit-sharing schemes.
So, What Should You Do Next?
Here’s our simple 5-step plan that applies to most SME businesses preparing for sale:
- Upgrade your management information
Monthly reporting should include profit & loss, balance sheet, cash flow, margin analysis, and KPIs. - Separate personal and business finances
Clean up shareholder loans, director costs, and any non-business spending. - Build a data room
Keep copies of contracts, leases, insurance policies, tax filings, and debt agreements in one organised, accessible place. - Reduce overdependence
Strengthen your systems, build out the management team, and lock in key people with the right incentives. - Engage an advisor early
Even if you’re not selling today, the right advisor can help prepare you for tomorrow.
How Friend & Grant and Xeinadin Can Help
Selling your business isn’t just about finding a buyer—it’s about proving your business is worth buying.
With the right preparation, you can avoid costly surprises, boost your valuation, and take control of the sales process from day one.
At Friend & Grant, we’ve helped countless SME owners achieve successful exits through business sales, MBOs, share buy-backs, and more. And now, as part of the Xeinadin Group, we offer even deeper expertise in deal support, tax structuring, and succession planning.
Thinking about your next move?
Planning to sell in the next 1–3 years?
The best outcomes start with early planning.
Call us on 01634 731390 or Book a Discovery Meeting to discuss your exit strategy.
With the right planning, you can maximise your business’s value and ensure a smooth, profitable transition.
Our services
If you would like to find out more about some of our services that might help you please take a look at our related pages:
Blogs related to Planning to Business Sales
Take a look at our other blogs on the topic of business sales and building value:
The Significance of EBITDA in valuing your company
Maximising the Value on Sale of Your Business: The Reality Check You Need
The content in this blog is correct as at 31st July 2025 See terms and conditions.
