One in three owners plan exit within 10 years

25/07/07 17:36

A third of the UK’s business owners expect to sell up in the next decade, Grant Thornton’s International Business Report (IBR) has revealed.

The international survey of 7,200 owners of medium to large businesses from 32 countries found that an average of 28% of privately-held firms globally are expecting to realise an exit.

Out of the UK owners expecting to sell within 10 years, 53% believe that the change will occur within three to five years, and 18% think it could happen within the next two years. The contrast with EU countries, where 27% anticipate change within a couple of years, is evidence that some may be waiting for clarification on capital gains tax relief, the report suggested.

While the actual number of British companies expecting change has been static since 2003, if Gordon Brown’s anticipated crackdown on capital gains tax relief occurs, many privately owned firms are expected to sell up.

The survey also found that 51% of UK business respondents believed the most popular type of sale option was a trade sale, followed by a management buy in or buy out, while only 8% foresee a flotation or IPO within the next 10 years.

With the potential upheaval, business owners are being encouraged to think ahead to allow for a good exit plan: “Exiting from a business is one of the most important decisions a business owner makes,” said Alysoun Stewart, head of Grant Thornton’s strategic services group.

“Careful and timely planning is essential to ensure the successful continuation of what has been built, to maximise the value of the business at exit and to protect the amount of wealth that ends up in the owners hands.”