PRIME Initiative

If you are over 50 then you are closer to retirement than most of the population. Even if you have a good 15 or 20 years of work left in you, it is likely that eventually you will want to stop. So what then will happen to the business you have built up - and can it help pay for the next stage of your life?

More than half of the respondents to a recent PRIME mini poll expect to sell their business as a going concern when they are ready to exit the business. A further 16 per cent of the olderpreneurs expect to keep it going by giving it to family or a friend.

Do you expect to eventually sell your business?

• 1. Yes - sell as a going concern 56% (49 votes)
• 2. No - will give away to family / friend retaining stake 15% (13 votes)
• 3. No - will give away to family / friend completely 1% (1 vote)
• 4. No - it will close but with sale of major assets 1% (1 vote)
• 5. No - it will close with sale of some minor assets 3% (3 votes)
• 6. No - it will close with nothing much to sell 22% (19 votes)
• 7. Other 2 2% (2 votes)

Source: visitors to www.primebusinessclub.com

The poll was run on PRIME’s other web site, www.primebusinessclub.com, which provides support for those starting or running a business after the age of 50.

A key finding was that about a quarter of the respondents expect their business to close when they leave. And the great majority of these don’t expect to be able to make much from selling the assets.

So there is a clear split between those expecting to get extra money from the business when they exit and those who don’t. This may be realistic - some businesses are worth something without the founder while for others the founder IS the business. The type of business is critical.

And so is its size. There is a well developed market for selling businesses over a certain size. Papers, notably Daltons Weekly carry classified listing of businesses for sale, and specialist business transfer agents will help with a sale in return for a fee. But once you get below a value of about £250,000 for the business the market gets less interested, and the costs involved in selling start eating into the proceeds.

PRIME is very interested in this process and whether there is anything we can realistically do to help the owners of smaller owner-run and self-employed businesses. Part of PRIME’s charitable mission is “the prevention of poverty in retirement”. Maximising the chances of business owners realising at least some of the value of their businesses when they pack it in would certainly help.