New research from wealth management firm Evelyn Partners has revealed that the majority of business owners with companies that earn more than £5 million annually are preparing for an exit.
With 65 per cent of business owners surveyed contemplating the sale of their company, and 40 per cent intending to do so within the next year, the reasons behind these plans vary.
One reason seems to be the possibility of a General Election within the next 15 months and a potential change in Government and consequential alterations to taxation.
Another significant reason for considering the sale of a business is the difficulty of accessing long-term capital and investment. 25 per cent of business owners surveyed cited this as the reason that they were considering selling.
The complications surrounding post-Brexit trade arrangements and the effects of high inflation were other reasons mentioned by the business owners surveyed.
With inflation driving up the cost of labour, energy, and materials, 23 per cent of business owners surveyed are contemplating selling for this reason.
Personal finance challenges also factor into this trend, as business owners look to liquidate the equity in their businesses.
However, about 36 per cent of those surveyed have chosen to delay their exit plans in hopes of obtaining a better price for their business.
The preferred exit strategy for the business owners surveyed who are thinking of selling is a private equity sale.
However, employee ownership trusts are also gaining popularity, with 18 per cent of business owners surveyed considering this route. Passing the business onto family members is also a popular option.
Are you a business owner who is considering exiting your business? Please contact us today to find out how we can assist you.
