The current market landscape

For UK SMEs turning over £1m - £40m, the case for early exit preparation is stronger than ever. With unpredictable interest rates and tighter lending, buyers now hold the upper hand in negotiations. The latest BDO Private Company Price Index (Q2 2025) shows valuation multiples easing across most sectors.

In this context, owners preparing for succession or sale must focus on improving operational efficiency and strengthening EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation). These are the measures which most directly influence how an acquirer values your business.

Key insights shaping today’s M&A market:

• 57% of market participants see buyers holding the advantage (DealStream, Q3 2025).
• Average technology multiples have fallen from 10.1x to 9.2x EBITDA (BDO, 2025).
• Nearly 40% of M&A deals in 2025 have been under £5m, signalling a shift to smaller, strategic acquisitions (UK Government, 2025).

Owners who act early to enhance EBITDA and efficiency will be best placed to protect and grow value when it’s time to sell.

What buyers are looking for

Clear financial performance

Buyers scrutinise EBITDA because it provides a cleaner view of underlying profitability than net profit. Strong, sustainable margins are directly linked to higher offers.

Operational resilience

Evidence of efficiency, repeatability and scalability reassures buyers that the business can deliver consistent results post-acquisition.

A credible growth story

Whether in technology, retail or services, acquirers favour SMEs that can articulate a growth strategy underpinned by operational discipline and realistic financials.

Practical strategies to enhance earnings

• Tighten costs
  Review suppliers, renegotiate contracts, and remove duplication. Even small efficiencies can lift EBITDA meaningfully.
• Diversify revenue
  Adding services, subscription models or e-commerce channels can improve resilience and add new streams of recurring income.
• Optimise pricing
  Revisit pricing structures to match customer value perception, not just cost-plus assumptions.
• Upgrade reporting
  Sharper management accounts give you the insight to make informed, swift improvements – and also signal professionalism to buyers.

Improving operational efficiency

• Leverage technology
  Automating routine processes frees staff for higher-value work and reduces long-term overheads.
• Measure what matters
  Implement clear KPIs and link staff incentives to productivity and performance.
• Invest in your people
  Continuous training raises capability, morale and retention, which buyers increasingly view as critical assets.
• Streamline processes
  Eliminate bottlenecks using lean techniques that cut waste and speed up delivery.

Creating a sale-ready business

Beyond financial and operational tactics, owners should cultivate a “ready at all times” culture. This means embedding efficiency and discipline, preparing diligence files in advance, and ensuring compliance is watertight. A sales-ready culture builds confidence for both staff and buyers.

Steps you can take now

• Commission an independent valuation to understand where you stand in current market terms.
• Engage an adviser early to build a pragmatic step‑by‑step plan, tailored to your sector.
• Prepare due diligence in advance with clean financial, legal and operational records.
• Market strategically by telling a buyer‑ready story that highlights your strengths.
• Network with likely acquirers through discreet relationship‑building well before a formal sales process.

Conclusion: Protecting and growing value

In today’s buyer‑driven M&A market, UK SME owners cannot afford complacency. Those who invest time in EBITDA and operational efficiency will not only command stronger multiples but will also have greater control over the timing and terms of their exit. If you’d like to understand your readiness and priorities, we invite you to book a confidential consultation Contact us - let's talk about you and your business. or try our Exit Readiness Calculator Exit readiness calculator.

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About Exit Strategy & Solutions

Ethical, expert, exit advice for UK business owners. We help SMEs prepare, grow value, and execute confidential business sales. Our team combines deep M&A expertise with practical business experience to deliver outcomes that exceed expectations. If you're considering your options, we'd welcome a confidential conversation about your specific situation.

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