The average age of SME owners is 54.5 years old with two thirds (65%) over the age of 50, based on research by Moore Stephens on 403,000 directors on the boards of 83,000 UK SMEs.

By failing to make plans, by either being too busy or underestimating the time required to put things into place, directors are putting themselves at a disadvantage when it comes to exit strategy.

Many small company directors are under the illusion that it would only take months to get a business ready for a trade sale whereas it is more likely to take several years.

As well as this there are processes involved to make a sale as quick as possible. Directors may have to restructure the business to make it more appealing for potential buyers, which is time costing to plan, implement and embed.

Tax arrangements need to be looked into to ensure the exit strategy is the most tax efficient and tax reliefs such as entrepreneurs’ relief and business property relief may also be available.

Steve Wheeler, a partner in the private client services team at Moore Stephens said: ‘SME owners often find it difficult to plan ahead for their exit from the business, but with retirement now imminent for such a large number, it’s vital that they do so.

‘Company owners frequently either don’t feel ready to address this issue until it is almost upon them or they are too busy with day-to-day operations to worry about it. If they take a forward-thinking approach, they can control the process to make sure that when they step down, they do so on the most advantageous terms for them.

 ‘Ensuring that the business is in the best possible shape to attract trade buyers and secure a good price takes time. Unless the effort has been put in to get everything ready beforehand, potential purchasers are unlikely simply to come along and conclude a successful deal as soon as a company is put up for sale.’