Family businesses in decline
Younger entrepreneurs aspire to keep business in family
Almost half of UK business owners would like to pass on their business to their children when they retire, yet less that 20% believe that they will do so, according to research.
The latest survey of business leaders discovered that younger generations were more optimistic that their children would take over the family business, as 40% of those aged between 18-34 felt ‘hopeful’ this would happen. Conversely, less than 10% of small business owners aged 55 or over think that their children will take over their business when they retire.
According to the research conducted by the Bank of Cyprus UK, men are more interested than women in their children inheriting the family business.
Tony Leahy, head of communications at Bank of Cyprus UK, said: “Many SME owners have established and developed their business with the dream that their children will one day take over. However, as time passes and they head towards retirement the reality dawns that, for many, this is unlikely.”
Banks have advised business owners to consider the importance of succession planning early on to avoid financial hardship when they come to retire.
“Rather than avoid the issue, it is important that business owners discuss this with their bank relationship manager, accountant or other trusted business advisor, as a failure to address succession planning may put their business at risk,” added Leahy.
Stephen Less, founder and head of Secrets, a table dancing chain commented: “Being the son/daughter of a successful business person doesn’t automatically mean that the children will be successful in the world of business too, and even if they are, different business sectors vary massively.”
© Crimson Business Ltd. 2010