A study of SMEs found that just over 12% of directors are aged 70 or over in the period from 2017 to 2018. This amounts to 73,430 individuals, up from up from 72,400 SME directors in the previous year.

The firm warns that if business owners are not prepared to exit when their business is at its prime, or when market conditions are favourable, they risk losing significant value.

They say it could take many months to optimise a business to hand over to new management or sell and owners could be disadvantaged if they have failed to plan effectively.

Mark Lamb, head of owner managed businesses at Moore Stephens said: ‘Our research shows that many SME directors continue working into their 70s, but most are carrying on far longer than they would probably like to due to a lack of suitable exit options.

‘After spending so many years building up a business, it’s a crying shame if SME owners can’t enjoy all the fruits of their labour when they retire. Company directors who are still working hard through their 60s need to make time to plan for what can often be a lengthy succession process, so they can exit in an efficient way that will deliver real value.

‘There’s a huge amount to think about, from making sure your business is a really strong acquisition prospect, to ensuring business affairs are wrapped up as tax-efficiently as possible. That will require joined-up advice to ensure all bases are covered and no opportunities are missed.’

Tax planning and wealth management considerations are also key, so that business owners can take full advantage of tax reliefs, while mitigating any potential impact these may have on other income and investments.

Exiting directors may also want to consider whether it is worth setting up a trust to minimise inheritance tax for relatives or whether Business Property Relief can reduce the value of businesses charged to inheritance tax.

Report by Rob Munro