SMEs bring added charm to the community, says survey.

Why are SMEs considering selling their business?

Are you planning on keeping your business in the family, or selling and moving on?

Recent research by American Express reveals that owners of SMEs are looking to sell, despite the intrinsic value their business brings to the community. The survey attributes the core reason to a lack of effective financial management, with many companies struggling to develop their business.

Survey shows many SMEs intend to sell their business

The report, The Economy of Shopping Small, stated that 39 per cent of small business owners wished to sell their company and indicated 67 per cent said it was highly likely that they will sell to individuals or businesses that are not within their family.

This was attributed to certain factors, with rising costs a factor for 82 per cent of respondents. Following this, the majority of those surveyed cited three key reasons:

  • Obtaining new customers
  • Keeping current clients
  • Overall worries surrounding financial stability

With many SME owners concerned about wealth management and other financial issues, it's not surprising that many expressed an intent to sell. However, the survey reported that the community appreciated the small businesses, with 62 per cent saying that it gave the community its identity and added to its charm. 

This is evident by the survey, which revealed that almost half of all shoppers (42 per cent) would continue to make purchases at family businesses, even with a 10 per cent increase in prices. This much higher than the 26 per cent who would continue to use online companies if there was a similar rise in pricing.

American Express Senior Vice President of Global Merchant Services Melanie Cochrane says that this emotional value is what consumers appreciate about small businesses. 

"When it comes to delivering a great customer experience it's the little things that count, and no-one does this better than small business owners. As such, it's no surprise two-thirds of respondents said they would miss their local small businesses if they were to close, or that 61 per cent say the local shopping village is the heart of the community," explains Ms Cochrane.

With many companies struggling to develop their business, they may require assistance with managing their finances in a way that fosters growth.

Worried about your finances?

As revealed by the report, many SMEs are considering closing, citing financial concerns as a key reason. A recent KPMG survey found that more than half of the businesses surveyed (53 per cent) did not believe they would be able to increase their prices by 5 per cent or more over the next year. 

Managing your accounts while staying focused on growing your business can be difficult. Using the services of a professional chartered accountant can help take the stress out of the process. It is important SMEs are provided with the right tools to succeed. If you are concerned about business development, contact the team at Wilson Porter who are happy to help.