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UK microbusinesses lack of succession planning

by Susie Hughes at 11:22 27/04/16 (News on Business)

The UK Microbusiness community, which employs a third of all workers in the UK, threatens to ‘leave a crater’ in the UK economy owing to a lack of succession planning created by a culture of low income and later life working according to new research.

The report by BusinessesForSale.com assesses the future fitness of UK microbusinesses and found these small but significant providers of employment and payers of PAYE and tax predominantly have older and ageing owners. More than half (58 per cent) are planning working past the age of 66 with 75 per cent them paying themselves equal to or under the living wage. More than half don’t have a succession plan, of those that do more than half plan to privately sell their businesses. Advertisement Rufus Bazley, Marketing Director at BusinessesForSale.com said: “Our research has found that most microbusinesses successfully support small numbers of staff. Most of their owners are aged 40 upwards and since under half have succession plans in the event of a sudden change in circumstance many would be unable to continue to trade. "In 10 years’ time, when half the microbusiness owners will be in their 50s and 60s this could have incredible implications for the economy." Microbusiness community The microbusiness community largely consists of well-established businesses owned and operated by business people for the long term. Most owners of microbusinesses surveyed were over age 41 with nearly half falling into the 41-55 year-old age group, a time when most larger corporate leaders take advice on succession planning and begin to assess the material worth of their businesses. Microbusinesses are small in terms of staff, (nearly three questers had one to three full time staff) it is considered that the owners, who admit to taking on a variety of job roles and earning less than or equal to a living wage, often don’t see their business as an asset for the future. Despite this many have very impressive turnovers – between £1 million to £5.5 million in five per cent of cases. Yet profits are modest with an average of £41,500 across the group and 15 per cent reporting a loss or break even. Mr Bazley said: “The stats on the contribution microbusinesses make to the UK economy are beyond impressive. “Yet little is being done to help these microbusinesses to consider the issue of succession planning, presenting a sizeable threat to the UK economy if high numbers simply fold when the owners are no longer able to operate them. We need more initiatives to support these businesses through their entire lifecycle and reward their founders with healthy exit plans.” Tweet -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99 2016

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