Lack of succession planning by UK SMES

Bosses of the UK’S small and medium-sized enterprises (SMES) are being urged to put in place a succession plan after a report published today found that nearly two-thirds have made no such provision.

The latest Future Attitudes report from challenger bank Aldermore revealed that 64 per cent of those leading such firms have no clear plan in place to ensure that their business does not suffer when key staff leave.

This equates to 3.52 million companies with fewer than 250 employees, and is up from 61 per cent last year.

This is despite 45 per cent believing that the biggest threat to their business would be if senior executives leave their organisation.

However, the younger generation of UK SME owners seem to be more organised, with 56 per cent of those aged 18-34havingasuccessionplan in place.

Carl D’ammassa, group managing director of business finance at Aldermore, said: “For UK SME leaders who have planned their own departure, our research tells us that on average, they aim to leave their company in just under four years’ time. What is troubling is that there are fewer senior executives with formal business succession plan compared to a year ago.

“Running a business can be very time consuming with ongoing demands from customers and staff. These challenges exert substantial pressure on leaders, so it is vital that a succession strategy is planned out to ensure businesses across the UK do not suffer when changes to key executives occur.” 0 ‘Vital’ strategy: Carl D’ammassa of Aldermore