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FD Recruit has warned that owner-managed businesses risk weakening their negotiating position at exit if they go to market without an experienced finance director. The recruitment firm said the gap is common among businesses with turnover below £20 million.
Data from the firm's placements and candidate interviews suggests finance leadership has become a more visible factor in sale readiness as investors scrutinise reporting, forecasts and management succession more closely.
FD Recruit, which interviews more than 5,000 senior finance candidates each year, found that nearly 60% of owner-managed businesses with turnover below £20 million entered a sale process without a finance director in post. In around 30% of its placements, the incoming finance director later becomes the successor when the owner steps back.
That points to a dual role for senior finance hires in smaller businesses preparing for a sale. In addition to producing stronger reporting and forecasts, the appointment can reassure buyers that the company has a management structure that will remain in place after the founder exits.
Buyer scrutiny
The warning comes as private equity investors become more selective. FD Recruit cited KPMG figures showing that UK private equity exits reached 96 in the first half of 2026, down nearly 30% on the same period a year earlier.
In this market, investors have more scope to wait for businesses that present clear financial information and a credible plan. A missing finance leader may not stop a deal outright, particularly if a buyer is focused on a company's product or market position, but it can become an issue during diligence and negotiations.
According to FD Recruit, investors often move quickly to fill the role after a deal completes if it is vacant at the point of acquisition. At a recent readiness session, one private equity investor said his firm appoints a finance director or chief financial officer on completion whenever the seat is empty.
The recruiter argues that this shows where buyer confidence tends to rest. If an acquirer sees senior finance leadership as an early post-deal priority, vendors may face questions over why the role was not addressed before launch.
Phil Scott, managing director at FD Recruit, said the issue goes beyond bookkeeping or compliance to the quality of information available to support a valuation discussion.
"A Finance Director does more than manage the accounts, because the right appointment builds the forecasting and reporting that an investor expects to see," Scott said.
"Owners who put that leadership in place a year or 2-5 years before a sale give themselves cleaner numbers and a stronger hand in negotiations," he added.
Succession role
The data also suggests the role can shape the transition after a founder leaves. In roughly three in ten of the firm's placements over the past year, the incoming finance leader became the natural successor once the owner stepped back.
This may be especially relevant for founder-led businesses that expanded quickly without building a finance function at the same pace. In such cases, a buyer is assessing not only historic numbers and future forecasts, but also whether management can operate without the founder at the centre of decision-making.
Bringing in a finance director before a sale can therefore affect more than the presentation of accounts. It can also help define decision rights, establish reporting disciplines and create a clearer structure for a handover to new ownership.
For acquirers, that reduces reliance on an exiting owner during the transition period. For sellers, it may support a smoother process by reducing uncertainty around the business after completion.
Scott said the gap is often most visible in companies where commercial growth has outpaced internal systems. Buyers may still back those businesses, but are likely to look for evidence that controls, reporting and leadership are strong enough to sustain performance under new ownership.
"A capable finance leader gives a buyer confidence that the numbers will hold once the deal is done, and that confidence is often the difference between a deal that completes and one that stalls in due diligence," Scott said.