Planning to exit? You aren’t alone

New findings indicate that a significant number of business owners are proactively preparing to exit their companies.

According to recent research conducted by Evelyn Partners, a wealth management firm, a majority of business owners whose companies generate over £5 million annually are contemplating an exit strategy.

The study reveals that 65 per cent of business owners in the UK are considering selling their companies, and almost half of them intend to do so within the next year. The reasons behind this surge in accelerated exit plans warrant further examination.

One prominent factor motivating business owners is the imminent General Election within the next 15 months. The possibility of a change in government and subsequent alterations in the tax structure has raised concerns among business owners, leading a quarter of respondents to expedite their business exit plans.

Additionally, the challenges associated with securing long-term capital and investment have become increasingly burdensome. Stringent financing conditions have prompted one in four business owners to contemplate selling their businesses.

The complexities surrounding post-Brexit trade arrangements and the impact of high inflation have also compelled numerous business owners to consider selling. Inflation has driven up the costs of labour, energy, and materials, prompting approximately 23 per cent of business owners to opt for selling their businesses.

Personal financial considerations also play a role in this trend, as business owners seek to convert the equity in their businesses into liquid assets.

However, around 36 per cent of business owners have decided to postpone their exit plans, hoping to secure a better price for their businesses in the future.

Among the preferred exit strategies, selling to private equity stands out. Approximately 20 per cent of business owners are actively seeking private equity buyers, with 11 per cent aiming to sell a minority stake and nine per cent planning to sell a majority stake.

Another emerging trend is the increasing popularity of employee ownership trusts, with 18 per cent of business owners considering this option.

If you are a business owner contemplating an exit strategy, we encourage you to reach out to us today. Our team can provide valuable assistance tailored to your specific legal needs, so speak to us.

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