How economic conditions impact business sales

Economic conditions sharply shape business sale activity. If the conditions are favourable, such as steady inflation and high consumer sentiment, business buyers are encouraged to be more active in their search for a business. If market conditions are adverse, such as high inflation or rising taxes, what does this mean for business buyers?

Selling a business during times of economic uncertainty
Selling a business during a period of economic uncertainty can be challenging, although with the right planning and marketing in place, you can execute a profitable business sale. We run down key factors to maximise the chances of a successful sale during periods of economic uncertainty.

Fair pricing – If your business is priced correctly and reflects the market value, you can continue to appeal to buyers during periods of economic uncertainty as the price is fair and reasonable.

Targeted marketing – By launching a targeted marketing strategy, you can appeal to buyers who meet your criteria. This includes buyers who are ready to proceed and in search of a business in your industry and the stated price bracket.

Strategic timing – While economic conditions may be tough, timing the sale of your business when profits are strong and the income flow is healthy can maximise the chances of a sale.

Seller financing – High inflation can deter business buyers from sealing the deal, as borrowing may be expensive and therefore, a long-term loan may be unsustainable. Seller financing can help sidestep this issue and make the sale achievable. Seller financing is a loan extended by the seller to the buyer to help them buy the business, which is a win-win for both parties.

Partnering with a reputable business transfer agent or advertising on a recognised business sale marketplace can aid the sale of your business as this provides access to targeted marketing and a pool of registered buyers.

What are the current market conditions?

The Business Distress Index from Real Business Rescue assesses the financial health of UK SMEs each quarter. The latest Q2 release shows that critical financial distress levels jumped by 21% year-on-year.

The number of critically distressed businesses rose to 49,309 in Q2 2025 from 40,613 in Q2 2024, which equates to around 8,700 more businesses experiencing worsening financial health. All the 22 sectors assessed as part of the Business Distress Index showed a higher number of businesses entering critical financial distress.

Critical financial distress levels across bars and restaurants jumped by 42% as operating costs increased following the increase in Employers’ National Insurance Contributions and National Living Wage in April
2025. As bars and restaurants employ a large number of part-time and full-time staff due to the nature of the trade, they were particularly crippled by the tax hike.

On the flip side, printing and packaging, manufacturing, and industrial transportation and logistics saw significant financial distress levels drop. These figures show mixed opportunities for business sellers and buyers alike. While economic conditions, seasonal trends, and consumer demand can shape demand in the business sale market, there are ways business sellers can adapt to maximise their chances of securing a buyer for their business.

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