Record number of small business owners planning to shrink or sell their businesses

According to a survey conducted by the Federation of Small Businesses one in seven small business owners are planning to shrink, sell or close their businesses during the first quarter of 2018. For the reasons given for this please read the article below which appeared in The Daily Telegraph today.

Roger Mundy, Managing Director, Beardsley Theobalds, 5th January 2018



One in seven SME owners plan to shrink business or sell up in next quarter

A record number of small businesses are planning to close down or sell up as inflation and weak demand from customers dents their prospects.

One in seven bosses expects to shrink their business or to quit completely in the coming three months, according to the Federation of Small Businesses’s (FSB) quarterly survey.

The industry group’s small business index turned negative for the first time since the aftermath of the Brexit vote, as 31pc of SMEs said they expect conditions to deteriorate in the next quarter, while only 27pc anticipate an improvement. Retailers and construction firms are particularly downbeat, as they face high inflation as well as extra costs from their forthcoming inclusion in the pensions auto enrolment scheme. Three-quarters of firms said operating costs are up on the year as labour, utility and input costs climb.

Profitability is down too as 41pc of firms reported a fall in profits, the highest proportion since 2013. Mike Cherry, the FSB’s chairman, said that domestic economic challenges need more attention at a time when Brexit negotiations are dominating the political agenda. “While the swift agreement of a transitional arrangement and an ambitious free-trade agreement with the EU are absolutely critical, it’s spiralling costs, weak growth and flagging consumer demand at home that are front of mind for small firms day to day. It’s troubling to see a record number of entrepreneurs seeking an exit as these challenges prove too much,” he said.

However, the study found exporters are increasingly optimistic as the weak pound is helping to boost demand.