Too many small businesses are at risk if managers have no strategies for retirement, according to a new survey.
The survey, conducted by Bibby Financial Services, shows that more than half of UK entrepreneurs are burying their heads in the sand rather than plan the future of their business when they retire.
One reason put forward for poor planning is that many entrepreneurs lack confidence in the future of their business, with 38 per cent of respondents believing that it will probably close after they retire.
Many entrepreneurs are also scared that, come retirement, they will not find anyone to take over their business that would do the job as good as themselves, leading to a premature end for many small firms.
Such an attitude poses a serious threat to the economy as well as employees working for smaller businesses.
Family businesses seem to be most at threat, mainly due to a reluctance to pass the reins onto outside interests. Only 24 per cent survive through to the second generation and only 14 per cent make it to the third generation.
Given that family businesses comprise of over 1.6 million businesses in the UK the issue is causing some concern.
David Robertson, Chief Executive of Bibby Financial Services, said: “Taking calculated risks is at the heart of everyday entrepreneurial business and entrepreneurs enjoy breaking the rules and pushing the boundaries.
“However, by not taking the simple step of ensuring that they have a good, well thought out contingency plan many firms could be jeopardising their employee’s livelihoods and threatening the future of their firm.”
