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Preparing a Business for Sale: Getting the Cost Base Right

Buyers value clean, transferable contracts. Tidying overheads twelve months before a sale can lift the valuation directly.

1 June 2026 7 min read

Every pound of overhead cut lifts the price

Businesses are commonly valued as a multiple of profit. On a 4x multiple, cutting £5,000 of annual overhead adds around £20,000 to the headline valuation — a far better return than the same effort spent chasing revenue.

Make contracts transferable

Buyers discount for contracts tied to the owner personally, long lock-ins and unclear terms. Move everything into the company name with reasonable notice periods well before due diligence starts.

Document it

A clean schedule of every supplier, contract term, rate and renewal date signals a well-run business. It also removes dozens of due diligence questions, which shortens the deal and reduces the chance of a price chip.

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