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One-in-five (20%) small and medium-sized enterprise (SME) homeowners plan to promote half or all their enterprise inside the subsequent two years in response to a brand new research performed on behalf of Handelsbanken Wealth & Asset Administration. A further one in ten (11%) respondents anticipate to downsize their companies over the identical interval. Of those, a 3rd (31%) blame rising prices, 18% cite performance-related points and an extra one in six (15%) must launch liquidity to take care of the cost-of-living disaster.
However whereas rising prices and profitability had been amongst among the catalysts for promoting up or making a change, the analysis additionally exhibits that many homeowners are motivated to promote all or a part of their enterprise for constructive causes. 40% plan to launch liquidity to spend money on different enterprise ventures, for instance. Simply six p.c mentioned they’re planning to promote their whole enterprise inside the subsequent two years, with 20% citing retirement because the driving issue, and an extra 20% having to take action attributable to an absence of household succession choices.
Regardless of the a number of challenges confronted by many SMEs, most firm homeowners (52%) don’t have any plans to vary their agency’s dimension or possession standing. Moreover, one in six (16%) are contemplating scaling up their operations inside the subsequent two years, indicating a welcome diploma of optimism amongst this enterprise section.
Christine Ross, Head of Non-public Workplace (North) and Shopper Director at Handelsbanken Wealth & Asset Administration mentioned: “Making adjustments to what you are promoting – whether or not you’re increasing, downsizing, promoting or beginning one thing new – generally is a very thrilling time, nevertheless it can be very disturbing. For those who’re releasing cash from what you are promoting by promoting all or a part of it, it may really feel like a giant weight off your thoughts when the method is lastly concluded. Nevertheless, there’s additionally the query of what to do with the proceeds of a enterprise sale, as you enter the following chapter of your life.
“It is a good time to take inventory of your scenario, and focus in your objectives for the longer term. It’s vital to do not forget that lots of the tax benefits you loved as a enterprise proprietor might not be accessible to you, so contemplate taking skilled recommendation as early as attainable to assist work out the most effective choices for you.
“For instance, establishing a household belief previous to what you are promoting sale might make use of inheritance tax reliefs, if this meets your monetary and property planning aims. You may also wish to benefit from allowances round ‘gifting’ cash to assist the following era, if it fits your private scenario, or spend money on monetary markets an effort to guard the worth of your capital in opposition to inflation. No matter you select to do subsequent, be sure to perceive the dangers and potential rewards concerned.”
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