Small business exodus predicted if Labour wins the next election
If the Labour party wins the next general election many UK small business owners will either shut down or try to sell their business. That’s the view of leading business consultant Paul Vousden based on the conclusions of a survey carried out by wealth manager Evelyn Partners.
The survey of 508 respondents reveals that two-thirds of UK businesses with a turnover of at least £5m are already preparing plans to exit their firm in the event of a Labour win. Two in five owners polled are planning to sell or wind down their business within the next year. Nearly one in four business owners said they had expedited such plans in the last year.
Business consultant Paul Vousden of Corporate Counsel, who advises businesses on succession planning said:”Despite Rishi Sunak’s determination to get the UK government back to a more sensible and focused agenda he seems to be constantly interrupted by controversy and infighting within his own party. The latest news that Boris Johnson has resigned as an MP with several of his MP supporters following behind has created another mini crisis for the prime minister as he battles to steady the ship and head for recovery. This of course is great news for Labour who are streets ahead in the polls and seem on course for a majority in next year’s elections.”
He added: “Concerns over a change in government and potential tax rises were the most common reasons amongst those speeding up plans to sell or wind down their business, cited by 26% of respondents. However, businesses rushing to sell should be wary of selling too cheaply, a decision they could regret for the rest of their lives. The sale must be planned properly so owners achieve the best possible price for their companies and walk away with a fair reward for their life’s work.
“Statistics show that almost half of all planned business sales will fail, often at the last stage once substantial legal and accountancy costs have been incurred by the seller. One of the most common reasons for the deal to fall apart is a lack of preparation, particularly in terms of due diligence from the buyer.