Entrepreneurs never really let go of their businesses – not even when they have sold them on.
New research from private bankers Arbuthnot Latham has found that 83 per cent of entrepreneurs remain connected to their firms in some way after selling, most often as advisors or non-executive directors.
Almost two-thirds perceive this continued involvement to be stabilising for their former firms in the long-run.
In addition, only a fifth of those interviewed reported that they were ‘perfectly happy’ with the way the business exit process went, and less than a fifth said they had a plan in place to protect their wealth post-exit.
Arbuthnot Latham interviewed 200 high net worth business owners with an average wealth of £3.2m from across the UK on the steps they take to prepare their businesses for sale.
The purpose of the survey is to compare the experiences of business owners who have been through an exit with those who are yet to go through the process.
Paul Beach, Head of Executives and Entrepreneurs at Arbuthnot Latham, said:
“Entrepreneurs are this nation’s biggest wealth and job creators and in order to help them maximise their incredible potential, we need to understand the journeys taken by entrepreneurs as they prepare to exit their businesses.
“The findings are surprising: perceptions of business exits differ widely when compared to those who have already been through the process. It’s crucial to understand this change in mindset if we want to give Britain’s entrepreneurs the support they need as they consider the next stage of their journey.”
Concerning motivations for selling, the data found that 60 per cent of first-time entrepreneurs are more likely to be concerned with when the right time for an exit might be.
On the other hand, the majority of business owners who came from a family business background focus instead on establishing a precise valuation of their business.
Ed Bussey, serial entrepreneur and currently CEO of Quill, a content production platform for e-commerce, welcomed the report: “At the beginning I was told to concentrate entirely on growing the business and not think about your exit – and I think there’s some truth in that.
“But over time, I’ve learned that there must be a plan, because what happens otherwise is you end up in a corporate finance process and you’ve got six months in which to sell the business. You suddenly find yourself talking to buyers who don’t know you or the business – and that’s not a great way to build a relationship.”
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