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Less than 50 per cent of UK SMEs have succession plans in the event that a founding member or director steps down, a new report has found.
Business advisers Vantis has published research carried out by Henley Management College across 110 SMEs, with the study highlighting some of the major problems of not being prepared.
David Birchall, Henley Management College spokesperson, told onRec: "A third of the businesses we spoke to predict a significant increase in turnover over the next five years, yet theyre failing to safeguard their longer term future by not putting in place people who can continue to drive the company’s success."
Other figures revealed by the research were that 22 per cent of business start-ups with a business succession plan in place aimed to keep the firm within the family should one happen.
And in the event of a business succession 32 per cent of those with a leadership contingency plan said they would most likely sell to a third party and sort out company legislation.
Nick Winters, Vantis spokesman, said: "The research clearly highlights the need for businesses to think about exit and succession plans from the outset. If todays business leaders fail to recruit, nurture and train managers for the future, there is a risk of damage to British business and entrepreneurship that will have far-reaching implications."
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