370,000 small businesses have plans to cease trading soon

370,000 small businesses could cease trading within the next five years, according to a new report. A further 424,000 are also looking to sell their businesses within the same time period.

The research, conducted by Opinium on behalf of businesses for sale online marketplace Bizdaq, found that 1.8 million jobs could be at risk. The majority of these would be affected by businesses that cease trading, as sales and transfers are often able to protect jobs.

Of the 1.8 million jobs at potential risk, 370,000 could be affected within the next 12 month as business owners cease trading or sell up. When you factor in businesses that face involuntary insolvency the position could be even worse in terms of jobs at risk.

Geographically, businesses based in London were more likely to be considering closing their doors in one way or another, with 43% of small business owners saying they planned to exit within the next five years.

The lowest proportion was amongst those in the East of England, with only 11% – around four times less than those in London.

Interestingly, revenue did not appear to be a major factor on whether an owner was looking to cease trading or sell up. As well as the lowest proportion of business owners looking to exit, East England also had the lowest average turnovers while the East Midlands had the highest turnover but was second only to London in terms of those looking to wind up or sell their businesses.

The survey also painted a snapshot of the average small business. Small businesses employing 6-49 people have an average revenue of £176,441 while those with 2-5 employees had an average revenue of £96,750. Sole traders bring in an average revenue of £29,166.

The average UK business makes £89,840 a year and employs 4.85 people. Just over a third (34%) of small business owners said they are looking to exit their business in the next five years.

By Phil Smith

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