Why we should care if small, local businesses close.

Since moving (back) to the UK in 2018, I’ve become passionate about being more ‘present’ in my local community.? Initially that meant actively supporting the environment through active & local transport, sports & leisure.? Then I began to consider the larger impact of small local businesses on the community, ultimately leading me to decide that the most lasting & structural change I can influence is by investing in small businesses which may be at risk of closure from owners who want to exit, but don't have a route to do so.

Small businesses are the heartbeat of our local economies, driving innovation, creating jobs, and shaping the communities we call home. They make up 90% of registered businesses, contribute circa 50% of GDP and employ around 60% of our workforce. .? These employees tend to live and work locally, also reducing the impact on our environment and supporting their local communities.

In my immediate region of London and west (Surrey, Bucks, Berks, Oxfordshire) 8.3M workers are employed by a small business who contribute ￡884BN GDP to the economy annually.? However, it’s a very volatile section of the economy - research supported by the Federation of Small Businesses (FSB) in Nov 23* estimates 69% likely to sell or divest in the next 10 years of which 19% will pass through non sale (liquidating or passing to family).?

In my region, 1M jobs will be lost through liquidation every year – some of these lost opportunities as owners failed to find an appropriate exit route.

Consider the customised, built-in furniture supplier catering to the hospitality & leisure industry, who may close its doors because the owner did not manage to find a suitable succession plan for their retirement. Clients are left trying to find an alternative supplier, employees lose their livelihoods, and the local economy suffers a blow. This narrative repeats itself: an HVAC air conditioning company based in Oxfordshire, serving commercial clients across the region for over three decades. With a reputation for reliability and quality service, the business has become a trusted name in the community. However, as the founder approaches retirement age, there is uncertainty about the future of the business. Without a clear succession plan in place, loyal customers and dedicated employees fear the company's closure, leaving a void in the local market for HVAC services.

Owners are wanting to cash out, retire and move on to different things.? With an ageing population and most investment in the market focused around medium to large businesses, small businesses have fewer options open to them.

Active planning by business owners for exit protects the longevity of the founder’s legacy, protects the businesses and removes the threat to the broader economy of closures, job losses, and disruptions to the local economy.

So what can be done?

1.???? Prioritise your goals - Be realistic & honest with yourself:

a.????? What is your main objective (personally) – why do you want to divest your business?? What are your ambitions for your future and how does divesting the business help you get there?

b.???? How do you want to feel at the end of the divestment?? This may be an odd question, but imagine yourself looking back in a few years time having passed on your business.? How would you like to feel about the process and seeing the business under new ownership?

c.????? How important are the employees and the clients to you?? Do you want to protect the legacy or are you comfortable walking away?

d.???? What timeline are you looking at – quick and sharp or a slow retreat/handover?

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2.???? Plan Ahead

Consider early on what your exit plan is likely to be and start to communicate and network to identify options.? There are multiple options to consider and getting your business (and your own mindset) ready is key.? Analysing your options vs your objectives and goals (above) will help you identify the optimal route.

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3.???? Get Help

Here I don’t mean brokers, expensive consultants or lawyers – these costs can and should be minimised.? There are communities of small business investors who can help you identify how to achieve your goals and support with realistic options to an exit plan/sale.?

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After a career growing multiple businesses across sectors, I am now a member of the Harbour Club , a group of investors specialised in small business investment.? I am actively seeking small businesses to buy –any sector from financial services to IT services, from furniture producers to air conditioner suppliers and installers.? Reach out to me to if you know a business looking for a sale.

If you're not ready for sale or investment, I am still also available for growth consultancy work.