One in four UK businesses pursued exit strategy in past year

One in four UK business owners reportedly “fast tracked” their exit strategies in the last year as the General Election looms, according to a survey conducted by Cencuswide of 504 business owners with turnovers of more than £5m.  

The research, which was commissioned by Evelyn Partners, reveals that 65% of owners are looking to sell off their enterprises, with two in five (40%) planning to exit within the next year. 

Exit plans across the UK’s business landscape have been fast tracked, with nearly a quarter (23%) of business owners having accelerated their plans to sell or wind down their business in the past 12 months.

The political landscape is the primary motivator for this decision. With a General Election set to take place within the next 15 months and Labour having a commanding lead in the polls, concerns over a potential change in UK government and subsequent changes to the tax regime have been cited as the top reason for UK business owners choosing to expedite their exit plans.

Challenges accessing capital and long-term investment have also been cited by many business owners, as one in four (25%) business owners have been encouraged to sell due to ongoing challenges accessing long-term capital, while 18% have cited the rising cost of this capital as a key motivation to sell. 

A similar number (19%) have cited the withdrawal of a key investor is behind their decision to pursue an exit strategy.

Complications navigating post-Brexit trade arrangements have been cited by 18% of business owners as a factor in deciding to sell, while 23% of business owners have decided to sell due to the toll that high inflation has had on their business, pushing up the cost of labour, energy and materials.

Tom Shave, partner at Evelyn Partners, said: “After a number of challenging years for business owners, it’s understandable that many might be considering their position for the years ahead. As the General Election nears, many business owners are concerned about the potential for tax changes, such as an increase in the rate of capital gains tax. Businesses also continue to face headwinds when it comes to their operations and long-term funding. 

“It is therefore understandable that many business owners are viewing the current climate as an opportune time to realise the gains of their success. However, others have delayed their exit plans which is likely to be driven by current economic uncertainty and potential worries that they may not get the best price for their business, as evidenced by a slowdown in M&A activity.”