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- From a £4m valuation to £3m in the bank: The hidden costs of selling a firm
From a £4m valuation to £3m in the bank: The hidden costs of selling a firm
A firm turning a £650,000 annual profit could be valued at £4 million. But how much of that valuation will you actually receive in your bank? Most owners only discover the hidden costs of selling a business once it’s too late to recover them.
Alastair Barlow
June 13, 2026
Value leakage is one of the biggest surprises of selling a firm. No one prepares you for ‘losing’ money that you’ve already mentally spent or allocated to another venture or personal investment.
But that’s the thing: you haven’t lost that money really. It never actually existed.
Experience teaches us to take business valuations with a pinch of salt. Too much can change between Heads of Terms and your exit to alter the payout (both in and against your favour). And then there’s the expense of selling a business, which can come as a shock to many.
Here are six hidden costs of selling a business and the potential impact they can have on the money you receive:
Working capital
Completion accounts
The buyer’s due diligence
A deal that takes too long to go through
Legal fees and personal tax
Leaving before the earn-out period
Let’s take a look at each one in turn.