The UK SME Retirement Crisis: Why Thousands of Business Owners Have No Clear Exit Plan

The UK SME Succession Challenge: What Happens When Business Owners Decide to Exit?

The UK economy is built on small and medium-sized businesses. Behind millions of companies are founders and owners who have spent years building something valuable, creating jobs, serving customers, and contributing to their communities.

However, many business owners eventually face the same question: what happens when they are ready to step away?

Selling a business, passing it on to the next generation, or finding a new owner requires planning. Without preparation, owners may struggle to unlock the value they have created.

• 5.7M | UK private sector businesses

• 99.85% | Businesses classified as SMEs

• 16.9M | People employed by UK SMEs

The next generation of business ownership is approaching

Small and medium-sized businesses make up almost the entire UK business landscape. According to UK Government data, there were approximately 5.7 million private sector businesses operating at the start of 2025.

Of these businesses, 99.85% were classified as small or medium-sized enterprises.

These companies employ millions of people and contribute trillions of pounds in turnover. However, many are built around the knowledge, relationships, and experience of their founders.

As owners reach later stages of their careers, planning for the future becomes increasingly important.

• 4.27M | UK businesses with no employees

• £2.8T | SME annual turnover contribution

• 991K | Self-employed workers aged 60+

Building a business is one challenge. Exiting one is another.

For many entrepreneurs, their business is more than just a source of income. It represents years of hard work, personal investment, and commitment.

However, a successful exit requires more than simply deciding to retire.

A potential buyer is not only purchasing revenue. They are looking at whether the business can continue operating successfully after the current owner leaves.

This means considering factors such as:

• How dependent is the business on the owner?
• Are processes documented?
• Are customer relationships transferable?
• Is financial information organised?
• Is the business attractive to potential buyers?

A business that has been prepared for transition is more likely to achieve a successful outcome.

The importance of succession planning

Succession planning involves preparing for the future ownership and leadership of a business.

For some owners, this may involve passing the business to family members. For others, it may mean selling to an employee, another entrepreneur, or an existing company looking to expand.

A clear succession plan can help business owners:

• Understand the value of their company
• Identify potential routes to exit
• Prepare the business for buyers
• Reduce disruption during ownership changes
• Protect employees and customers

Without a plan, owners may find themselves trying to sell at a time when they have limited options.

An ageing self-employed population

The number of older self-employed workers in the UK has increased over recent years.

There are approximately 991,000 self-employed workers aged 60 or over, representing around 23% of all self-employed workers.

For many of these individuals, their business represents a significant personal asset. However, converting years of ownership into a successful exit requires preparation and access to the right opportunities.

Common challenges faced by owners include:

• Not knowing the true market value of their business
• Not knowing where to find suitable buyers
• Having limited time to prepare for a sale
• Running a business that relies heavily on their own involvement

Finding the right buyer can be difficult

Selling an SME is not just about finding someone willing to purchase a company. It is about finding a buyer who understands the opportunity and has the ability to continue growing the business.

Many small businesses are sold through traditional routes such as:

• Personal networks
• Word of mouth
• Local connections
• Business brokers

While these methods can work, they may limit the number of potential buyers a business reaches.

A wider marketplace can help connect business owners with entrepreneurs, investors, and operators who are actively looking for established businesses.

Why buyers are looking at established businesses

Starting a business from scratch can be challenging. It often requires years of building a customer base, developing systems, and establishing a reputation.

For many entrepreneurs, acquiring an existing business provides a different path.

An established SME may already have:

• Existing customers
• Revenue history
• Supplier relationships
• Brand recognition
• Operational systems
• Employees and expertise

This creates opportunities for buyers who want to grow an existing company rather than start from the beginning.

The opportunity ahead

The UK SME market is entering a period of significant change.

Millions of businesses will eventually need new owners as entrepreneurs decide to retire, move on to new ventures, or explore different opportunities.

Making it easier for buyers and sellers to connect can help preserve valuable companies, support entrepreneurs, and ensure successful businesses continue into the future.

A transparent and accessible SME marketplace can provide business owners with more options while helping the next generation of entrepreneurs discover established opportunities.