A third of medium-sized business owners are planning to sell their business, a report by law firm Mills & Reeve has found.
The research into the health of the UK’s mid-market sector reveals that 33% of business owners are thinking about an exit strategy.
More than a fifth (44%) report that sustaining business growth has never been harder in the current climate, and 4 in 10 see selling their business as a less risky compared to trying to generate growth.
However, business owners planning to sell also face multiple uncertainties:
• 39% worry they will “miss the boat” if they do not sell quickly
• 34% are concerned that they will sell too quickly
• 29% say they are being forced to sell up.
While selling may seem like the best option for many medium businesses, 63% of respondents worried that too many companies are being sold before they have a chance to reach their full potential. This could in turn, be damaging to the wider economy.
Nigel Holland from Holland & Co Chartered Accountants said:
“Many business owners have emerged successfully from the recession and are now contemplating their next step. Some will wish to continue at their current level and others will be planning to expand their operations.
However there are many more business owners who are considering an exit strategy. This may be because they find planning an expansion of their business as being too stressful or it may be that they have reached a time in their business life when they are starting to look forward to retirement.
There can be risk associated with business expansion and not all business owners are capable of achieving this goal. There needs to be detailed tax planning if a business owner plans to sell or retire from his or her business.”