Business owners need to plan ahead
Shropshire business owners are being urged to think carefully when it comes to exit planning particularly with an election looming.
Sarah Hartshorn, an Associate at Dyke Yaxley Chartered Accountants in Shrewsbury, said: “The General Election is likely to bring yet more uncertainty for business owners – especially anyone who is considering when to exit their business.
“And with an ageing business owner population, and younger business owners preferring to use contractors rather than employing staff, there is a significant risk the new Government will find the UK business economy looks quite different in the next few years.”
Dyke Yaxley is a member of the Corporate Finance Network – an organisation that assists small and medium sized businesses to grow a well-capitalised business, organically or by acquisition, and encourage business owners to plan for their eventual exit so they are more sellable and more valuable when the time is right for them to sell their business.
Latest research by the CFN said that 53.3% of advisers thought it was a buyer’s market and many reported that vendors were unrealistic about how quickly their business might sell or its likely value.
Sarah said: “Exit planning is essential for business owners thinking about retiring if they want to ensure a smooth process and the eventual walk-away price they’re looking for.
“I would encourage all business owners to seek advice soon, as you never know when you may receive an offer out of the blue and you may need to be ready to make the most of this interest.”
Sarah said in the UK and Republic of Ireland in 2015, there were just over 750,000 active companies where the average age of directors was over 56.
Now, in 2024, according to data platform ‘Mark to Market’, there are more than 1.5 million directors of that age, and more than 460,000 of those are already aged over 66.
“These businesses need to be sellable when the business owner is ready to retire. If they don’t transition to new owners, the Chancellor may find that the tax income from small companies decreases rapidly over the next few years,” said Sarah.
“The new Government will certainly be hoping that more deals are done and these small companies and employers don’t leave our local economic landscape for good.”
