There are five main ways to exit a UK owner-managed business: trade sale, management buyout, employee ownership trust, family succession, and private equity. Each has different financial outcomes, different timelines, different tax treatments, and different implications for the people who work in your business. The right route depends on what you want from the exit. Not just financially, but personally.
A comparison at a glance
| Route | Typical headline price | Timeline | Full exit? | Who buys it |
|---|---|---|---|---|
| Trade sale | Highest potential | 6 to 12 months | Yes | Another company |
| MBO | Mid-range | 4 to 9 months | Yes | Management team (PE backed) |
| EOT | Market value (deferred) | 3 to 6 months | Deferred over 3 to 7 years | Employee trust |
| Family succession | Often below market | Months to years | Partial or gradual | Family members |
| Private equity | High (with second exit upside) | 6 to 12 months | Not initially | PE firm (you retain a stake) |
Trade sale
A trade sale means selling your business to another company. This is the most common exit route in the UK mid-market and typically generates the highest headline price, because strategic buyers can pay for synergies that financial buyers cannot extract. It is a clean exit: you receive cash and the business moves into new ownership.
The process runs six to twelve months from appointing an adviser to completion. Confidentiality is harder to maintain in a trade sale than in other routes, because the process typically involves approaching multiple potential buyers.
Management buyout
An MBO involves your existing management team acquiring the business, backed by private equity and/or bank debt. The advantage is continuity. The people who know the business best are the buyers. The disadvantage is that the price is constrained by the amount of leverage the team can raise, which is typically lower than what a strategic trade buyer might pay.
MBOs work best when the owner has a capable management team that can credibly run the business, and when cultural continuity matters to the seller.
Employee Ownership Trust
An EOT transfers controlling ownership to a trust held on behalf of all employees. Following the October 2024 Budget, the previous CGT exemption on EOT sales was removed. Sellers now pay CGT on the same basis as a trade sale. What remains is the employee bonus exemption (up to £3,600 per year per employee, income tax-free) and the cultural and legacy benefits of employee ownership.
The consideration is typically paid to the seller over three to seven years from business cash flows, which means no upfront cash event.
Family succession
Passing the business to children or other family members is emotionally appealing but practically complex. It requires careful tax planning. Business Property Relief for IHT, capital gains management, and potentially a staged handover over several years. The commercial success of family succession depends entirely on whether the next generation is ready and willing to take it on.
Private equity
PE is not a full exit initially. It is a majority sale (60 to 80%) in which you retain a stake and continue in the business through a three-to-five-year growth phase. The full exit comes at the end of the hold period when the PE firm sells on. This route generates the highest potential total return but requires you to remain engaged and accept institutional governance for several years.
Frequently asked questions
Which exit route generates the most money? A competitive trade sale process typically generates the highest headline price, because strategic buyers can pay for synergies. Private equity can generate a higher total return when both the initial and second exit are taken together, but the second exit is not guaranteed.
How long does each exit route take? Trade sales and PE processes typically run six to twelve months from appointing an adviser to completion. MBOs run four to nine months. EOT structures can be completed in three to six months. Family succession is the most variable. It can take years.
Can I choose my exit route, or does the market decide? You have significant influence over which route you pursue, but the market has a view. An MBO requires a capable management team with PE backing available. PE requires a business of sufficient scale. A trade sale requires willing strategic buyers. Your corporate finance adviser will help you assess which routes are realistic given your business profile.
Do I have to tell my management team before going to market? Not necessarily. Most sellers conduct an initial market sounding or approach potential buyers confidentially before involving management. When and how to bring the management team into the process is a strategic question. Your adviser should guide you on timing.
What happens to my employees when I sell? In a share sale, the company transfers intact. All employment contracts continue, all TUPE protections apply as a matter of law. In an asset sale, TUPE regulations also apply to employees associated with the assets being transferred. Buyers are generally required to honour existing employment terms.