Why the First Quarter Matters More Than You Think

For many business owners, an exit begins as a loose idea rather than a fixed plan. It might be driven by personal circumstances, market conditions, or simply a sense that the time is approaching. However, the most successful exits are rarely rushed. They are planned carefully, often over several years, with the first quarter of the year playing a critical role.

The early months of the year offer a rare window of opportunity. Last year’s performance is becoming clear, strategic priorities are being set, and there is time to make meaningful improvements before a sale process gathers momentum. Even if an exit is not planned until later in the year, or further down the line, taking the right steps in the first quarter can significantly improve outcomes, reduce risk, and protect value.

Step One: Obtain an Early, Realistic Valuation

One of the most common mistakes business owners make is delaying a valuation until a sale feels imminent. By then, expectations may already be fixed, and there is limited time to influence the outcome. An early valuation provides a crucial reality check and a benchmark against which progress can be measured.

In the first quarter, an indicative valuation helps clarify what drives value in your business and where potential weaknesses lie. It allows you to understand how buyers may view the business today and what changes could improve that position. Importantly, it also gives you time to align expectations and plan accordingly, rather than being forced into reactive decisions later in the year.

Step Two: Streamline and Strengthen Your Financial Information

Clean, reliable financial information underpins every successful exit. Buyers and investors will scrutinise accounts closely, not just for accuracy, but for consistency and clarity. Poorly prepared records slow the process, increase perceived risk, and often lead to price reductions.

The first quarter is the ideal time to review the quality of your financial reporting. This includes ensuring management accounts align with statutory figures, addressing any historic inconsistencies, and improving the presentation of key performance indicators. Clear explanations for one-off items, owner adjustments, and changes in performance help control the narrative and reduce scope for challenge during due diligence.

Step Three: Start Tax Planning Early, not at the Point of Sale

Tax planning is one of the most significant determinants of net proceeds, yet it is often left too late. Once a deal is underway, options can be limited, and opportunities missed. Early planning allows time to structure the business and the transaction in a way that supports tax efficiency.

During the first quarter, business owners can review shareholder structures, remuneration strategies, and eligibility for reliefs such as Business Asset Disposal Relief. Planning ahead also helps manage cashflow around tax liabilities and avoids surprises that can derail negotiations. Early tax planning is about control, not avoidance, and ensures that more of the value created ends up where it belongs.

Step Four: Identify Likely Buyers or Investors Early

Understanding who might buy your business, and why, is a vital part of exit planning. Different buyers value businesses differently. Trade buyers may focus on synergies, private equity on growth potential, and management teams on sustainability and funding structures.

The first quarter is a good time to consider who your likely buyers or investors might be and what they will be looking for. This insight can shape how you position the business, where you focus improvement efforts, and how you tell the story of your business. Early consideration also allows time to address issues that may be particularly relevant to certain buyer types, such as customer concentration or management depth.

Step Five: Strengthen Governance and Reduce Owner Dependence

Strong governance is increasingly important in business sales, particularly for larger transactions or investment-backed deals. Buyers want reassurance that the business can operate effectively without the owner’s constant involvement and that decision-making processes are robust.

In the first quarter, owners can review board structures, reporting lines, and key controls. This may involve formalising processes that currently rely on informal knowledge or introducing additional oversight where appropriate. Strengthening governance not only supports a smoother exit but also improves day-to-day performance and resilience.

Why Early Action Creates Better Outcomes

Taking these steps in the first quarter creates momentum and optionality. Rather than being forced into a sale on someone else’s timeline, early preparation allows business owners to choose when and how they exit. It also reduces stress, as issues are addressed proactively rather than under pressure.

Businesses that prepare early tend to experience smoother due diligence, stronger buyer confidence, and more robust valuations. Preparation signals professionalism and control, qualities that buyers value highly.

Exit Planning Is Not Just About Selling

It is worth noting that exit planning delivers benefits even if a sale does not take place in the short term. Improved financial reporting, clearer governance, and better tax planning strengthen the business regardless of outcome. Many owners find that by preparing for an exit, they end up with a business that is easier to run, more resilient, and more valuable.

The first quarter sets the tone for the year. Decisions made now shape what is possible later.

Moving Forward with Clarity and Confidence

Planning a business exit is one of the most significant strategic decisions an owner will make. Starting early, with a clear focus on value, risk, and readiness, puts you in control of that process.

At UHY Williamson Croft, we support UK business owners through every stage of exit planning, from early valuations and financial preparation to tax planning and transaction support.

If you are considering an exit later this year or want to understand your options, get in touch to discuss how we can help you prepare with confidence.