Small business owners could be risking their financial future by failing to adequately prepare for retirement, according to an accountancy firm.
With the average age of directors at the UK’s small and medium-sized companies nearly 55, and one-third over 60, Moore Stephens has raised concerns too few are putting the time and effort into managing their exit from the business, either by readying the company to be sold or by laying the groundwork for a successor to take over.
“For those who have spent a lifetime nurturing their companies and watching them grow, it can be very hard to let go. Their businesses are like their children,” said Steve Wheeler, a partner at the accountancy firm.
“Company owners frequently either don’t feel ready to address this issue [of retirement] until it is almost upon them or they are too busy with day-to-day operations to worry about it.”
A survey for the Federation of Small Businesses earlier this year found one-quarter of small business owners planned to rely on their companies to fund their retirement.
By failing to consider life after their company, owners are “putting themselves at a disadvantage” when it comes to stepping down, Moore Stephens added.