Two-thirds of British entrepreneurs who are considering selling their business say they have no plans to reinvest the money they earn from the sale into a new venture, according to new research.
A study from the Tenon Forum has revealed a trend that suggests the country’s entrepreneurs could be gearing up for a mass exodus that will leave Britain deprived of venture capital and skilled business acumen in coming years.
The study found that more than a quarter of small business owner-managers might sell their business in the next few years, yet only 5% of this number are planning to reinvest their capital in a new business.
Meanwhile, 66% said they have no plans to reinvest what they earn from their sale into a new business of their own or as venture capital to help companies with high growth potential move on to the next stage of their growth.
The research also found disparities between different sectors in terms of owner-managers’ intentions post-sale.
In the manufacturing industry, for instance, 54% said they plan to re-invest the money earned from their sale, while just 12% in the construction industry said they would do the same.
Manufacturers were also the most keen to remain in business, with three-quarters saying they would stay involved.
“The frenzied lifestyle of the UK’s owner-manager is one that only the strong-willed can handle for a concerted period of time,” said Harry Dhand, director of corporate finance at Tenon.
“The stress and strain of business owner-management can take its toll, and it’s common practice to see owner-managers thinking of selling after 10 years of hard work building their business.
“It is worrying however to see so many thinking about leaving the fold altogether. No economy would look healthy if up to a quarter of its businesses decided to pack up.”
