Getting a deal done ultimately comes down to one thing: whether a buyer and a seller can agree on what a business is worth. It sounds obvious, but it is often where deals stall, drag on, or fall apart entirely.

Right now, that gap is narrowing. In our latest survey, 41% of respondents said buyers' and sellers' valuation expectations were converging, against just 12% who saw them moving further apart. That matters for a simple reason: alignment on price is what gets deals over the line, and it helps ease what can otherwise be a fraught process for an owner selling a business they have spent years building. It is not only easing the process for sellers, either. Deals that do complete are commanding stronger terms too, and the average value per smaller deal has already risen this quarter.

Steady, if more selective

The deal data reflects a market that is holding up. Among the businesses we focus on – those with an enterprise value under £150 million – volumes eased to 217 in the second quarter, from 273 previously, with total value moving from £7.4 billion to £6.7 billion. Notably, the average value per deal actually rose, from £27.1 million to £30.9 million, suggesting the deals getting done are, if anything, better ones.

Sentiment has softened only slightly: 53% of respondents still expect deal volumes to increase over the coming quarter, and debt availability has held broadly steady.

A political backdrop worth watching

This week, the UK got its seventh prime minister in ten years, Andy Burnham. Most business owners have long since stopped being surprised by that particular number. Less easy to shrug off are the persistent rumours from several of his allies about aligning capital gains tax with income tax, potentially taking the top rate to 45%.

What this means for business owners

Political speculation will run its own course either way. What is within an owner's control is understanding how buyers are currently valuing businesses like theirs, and deciding whether now is the moment to find out what your business could achieve in the current market.

If you are starting to think about your options, whether that is a sale, raising capital or an acquisition, an early conversation can be a useful place to begin.

Read more in the July edition of UK Private Company Director.