ONLY 16% OF NORTH WEST FAMILY BUSINESSES WILL STAY IN THE FAMILY.

HAINES WATTS

PRESS RELEASE

July 20, 2010.

ONLY 16% OF NORTH WEST FAMILY BUSINESSES WILL STAY IN THE FAMILY.

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Only 16% of North West businesses owners will hand control to younger family members when they decide to retire or exit, and 42% of business owners are worried they’ll never extract capital or monetise their investment.

Those are some of the key findings of a survey of owner-managed businesses by UK top 20 chartered accountancy firm Haines Watts.

“Despite economic circumstances, there’s value to be maximised and money to be made provided a business owner has a plan – and I believe there’s a lot of businesses in the North West who are perhaps sitting on more value than they realise,” said David Fort, partner, Haines Watts Manchester and Preston (Watch video).

“But the thought that business owners will not get value out of their business come retirement is obviously a major issue, and while, historically, owner-managed businesses have been passed down to other family members, currently only 16% say they’ll now do that.

“I would say that the number of family businesses being passed on to other family members has decreased rapidly in the past five years, and that the traditional family firm is going to become a very rare beast.

“That’s not to say that there are not options for the 84% of business owners who won’t pass their business on, but it is crucial to take advice and put a plan in place that will take three to five years to drive through to fruition.

“Tax planning is vital, though, and what might seem to be pricey advice early in the process could save a fortune come exit time – for instance, one business owner made some unusual tax structure decisions aimed at mitigating the cost of school fees, but the arrangement wound up costing him several hundred thousand pounds more on the sale of the business than the saving he had made.”

Of the 8,700 businesses invited to take the Haines Watts Business Owner Survey, 645 responded giving a response rate of 7.4%. A selection of business owners were further invited to take part in in-depth interviews.

Haines Watts is a UK top 20 chartered accountancy firm specialising in the owner-managed sector, providing a broad range of services out of its 50 offices. The firm has 80 years experience and 30,000 clients.

Ends

Further information:

Iain Macauley

im@pressrelations.co.uk

07788 978800

http://www.hwca.com/offices/accountants-north-west.php

Photos here: http://www.flickr.com/photos/pressrelations/sets/72157624275784545/