Why Now Is the Time to Act: Small Business M&A Opportunities in the UK
The UK small business M&A market is continuing to build momentum. In the wake of the pandemic and sustained cost-of-living pressures, a growing number of owner-managed businesses are coming to market, while buyer appetite in the sub-£1.5 million segment remains strong. The majority of completed deals still fall below £1 million — an area where Pearson McKinsey provides focused, hands-on M&A support.
Transaction volumes under £1 million rose by close to 15% in 2024, driven largely by retirement planning, succession challenges and increasing regulatory and compliance burdens. Many long-standing business owners are choosing to sell while valuations remain robust, and with potential changes to Business Asset Disposal Relief (BADR) anticipated from April 2025, some sellers are accelerating exits to secure the current 10% Capital Gains Tax rate.
For sellers, market conditions remain favourable. Strong demand from buyers combined with a limited supply of quality businesses is supporting solid multiples, particularly for well-run, resilient companies.
For buyers, smaller acquisitions continue to represent one of the most efficient routes to growth. Acquiring an established business offers immediate access to customers, contracts and experienced staff, without the complexity often associated with private equity-backed deals. Roll-up strategies and bank-funded acquisitions are also becoming increasingly prevalent across service-led sectors.
Looking ahead to 2025–26, the outlook for the UK’s micro-M&A market remains positive. With more businesses expected to come to market and an expanding pool of trade and professional buyers seeking high-quality opportunities, small business M&A continues to present attractive prospects — enabling owners to exit on strong terms and buyers to acquire at achievable valuations.