Gordon Scott, Head of Investment & Client Solutions at Brown Shipley, a Quintet Private Bank, discusses the findings of recent research among entrepreneurs and offers some tips as they grow their businesses – and wealth.
Entrepreneurs are a very important segment for us at Brown Shipley and, as such, we regularly carry out research with UK business-owners to find out more about how they are feeling and what they need to support them on their journeys.
The findings are always fascinating, but particularly so this year, as they mark a real difference in attitudes between younger and older business owners – not only in confidence levels, but also in how they intend to seek growth.
Far greater confidence among the young
Having surveyed 4,000 UK entrepreneurs, we found that 68% of entrepreneurs under 35 are confident that their personal and business ambitions are aligned, up from 64% in 2023. By comparison, confidence among UK entrepreneurs across all age groups has fallen to 47%, down from 60% last year.
While 59% of younger entrepreneurs express confidence in the long-term strength of their business, down marginally from 61% in 2023, just 42% of all entrepreneurs share their confidence, down from 53% in 2023
The same trend is evident when entrepreneurs were asked about their confidence in their business as a primary store of wealth for themselves and their families. While 59% of younger entrepreneurs express confidence in the long-term strength of their business, down marginally from 61% in 2023, just 42% of all entrepreneurs share their confidence, down from 53% in 2023.
Greater focus on external investment
Differences between younger entrepreneurs and the cohort as a whole were also stark when it came their business growth strategies. As a whole, 24% of UK entrepreneurs say they intend to seek external investment in the next three years as part of their company’s growth plan. In contrast, 47% of entrepreneurs under 35 say they will seek external investors in the mid-term.
Although entrepreneurs under 35 are almost twice as likely to be seeking external investors, we still saw a significant year-on-year drop in those wishing to open their business up to outsiders (down from 64% in 2023). Part of this, we suspect, is a recognition that although inflation is down and consumer confidence is up, the business environment remains challenging, with geopolitical and economic uncertainty very high indeed. Finding investors who can be reliable, long-term contributors of both financial and intellectual capital can be a real challenge, not to mention the due diligence requirements necessary. It is not surprising then that many investors are preferring to keep their businesses closely held for the time being.
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Lee Goggin
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More of an eye on their exit
The seeming impossibility of seeing decades into the future also seems to be something which younger entrepreneurs have really taken to heart when it comes to exit strategies. Business-owners under 35 are considerably keener to exit their business via a sale than their older peers are, with 31% of those under 35 saying they intend at some point to sell their business in its entirety. That compares to 25% of entrepreneurs between 35-54 and 5% of entrepreneurs aged 55 and above.
The seeming impossibility of seeing decades into the future also seems to be something which younger entrepreneurs have really taken to heart when it comes to exit strategies
This does seem to indicate a desire among the young to make their money and run before their sector undergoes disruptive change. However, I would say that it is also a mark of these dynamic wealth creators wanting to be serial entrepreneurs throughout their whole lives. That is certainly something I see among our younger entrepreneurial clients. Very often they have hugely diverse interests and areas of expertise, with the only limit to what they would like to do being the number of hours in the day.
Below are some key tips and considerations for business owners considering selling their business:
When is the right time to sell your business?
There are many reasons, both personal and commercial, for those considering selling their business. Regardless of the reason or timing for a business sale, early preparation is key. This is more than just about the practicalities, there are also emotional considerations. It can be hard for a business owner to let go of a business they’ve poured their heart and soul into.
There are many reasons, both personal and commercial, for those considering selling their business. Regardless of the reason or timing for a business sale, early preparation is key
Why do I need a Client Adviser when selling my business?
A Client Adviser will ensure a clear understanding of your priorities and most importantly your needs and priorities for the future. Your Client Adviser will guide you through every step of the process, pre and post sale along with implementing future plans aligned to you and your family’s needs.
What professional support should I consider when selling my business?
Once your goals are clear, we can help you build the right advisory team for the transaction, tailored to your personal requirements. Alongside your Client Adviser, you will typically need legal, tax and corporate finance advisers.
What questions should I be asking when considering whether to sell my business?
Crucial questions to ask are:
- Why am I selling and what do I want to achieve?
- Do I want to retire and step away entirely or keep a hand in the business?
- Are my personal affairs in order to allow me to exit efficiently?
- Do I place value on maximum cash up front or will I take a higher overall value if I defer some of the considerations or payments?
- What will this mean for my employees and management? Who is the buyer and what’s most important to you?
Where to start when selling a business?
Spend time ‘working on your business, not in your business’ ahead of selling. This can help maximise your business value and lay the groundwork for the future. Think about your long-term plans and future objectives. When you are ready to sell and your personal objectives are clear – bring together an advisory team to examine options, valuation, potential buyers, enhancements to maximise value and to consider the structure of the potential deal.
Spend time ‘working on your business, not in your business’ ahead of selling. This can help maximise your business value and lay the groundwork for the future
Important information
The investment strategy and financial planning explanations of this piece are for informational purposes only, may represent only one view, and are not intended in any way as financial or investment advice. Any comment on specific securities should not be interpreted as investment research or advice, solicitation or recommendations to buy or sell a particular security.
We always advise consultation with a professional before making any investment and financial planning decisions.
Always remember that investing involves risk and the value of investments may fall as well as rise. Past performance should not be seen as a guarantee of future returns.
