Two-fifths (40 per cent) of female business owners plan to pass their business down to children or other close relatives when thinking about exit strategies and succession planning, research from Charles Stanley has found.

Its study highlighted that some female business owners were reluctant to commit to fully step away from their business, with 16 per cent planning to step down from the day-to-day running of their business but staying involved as a chair or non-executive director (NED).

Furthermore, 13 per cent said they would step down from their business but stay on the board.

While many were planning to keep their business in the family, other had different plans, with 14 per cent of female business owners stating they will restructure when it comes to exit strategy and succession planning, while 10 per cent plan to merge their business with another in their portfolio.

Nearly one in 10 (9 per cent) said they had no intention of keeping their business within the family, while 6 per cent believed they would sell or hand their business to an employee.

Charles Stanley described its findings that 9 per cent had no idea what to do with their business in the future and 8 per cent having nobody to pass their business to as “concerning”, as this could have significant implications on a business’s future, including the success and growth prospects or employee retention.

Looking beyond exit planning, 35 per cent of female business owners said they planned to retire to spend more time with their family, while 26 per cent planned to retire to spend more time on their hobbies and interests.

However, the study found that many were planning to continue with their entrepreneurial activities after exiting their business, with 15 per cent of female business owners expecting to become a business or executive coach, 14 per cent looking to move on to charitable and non-profit work, and 14 per cent planning to start another business.

The same proportion (14 per cent) planned to build a property portfolio and 8 per cent said they would become an angel investor.

“Thinking about exit strategies and succession plans can feel a daunting prospect,” commented Charles Stanley financial planner, Mia Kahrimanovic.

“Having invested not only considerable financial capital, but time and emotional efforts too, parting ways with a company can be comparable to ending a relationship.

“Notably though, female business owners are prioritising keeping their business ventures in the family. This is certainly positive, considering family business is a huge contributor to the country’s economy, accounting for nearly half of all UK private sector employment.

“Although the idea of leaving something you cherish in the hands of people you love and trust is natural, the intergenerational transfer of business is fraught with nuances and complexities that need careful planning in order to continue business success.

“It’s crucial that these are not forgotten, and that appropriate advice is sought so that no issues arise and a solid exit plan is in place for when the transfer does occur.

“Financial advisers also work closely with accountants and solicitors to achieve the best outcome possible for clients - from business inception to exit.”

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