Eight in 10 small business owners have no exit plan

Jacob Grattage, Reporter, Business & Accountancy Daily - Croner-i

The majority of small business owners have no exit strategy, despite 8% planning to sell up within three years.

While 79% of business owners do not have an exit plan of any kind, over a third said they had no plans to sell and had ‘no intention of creating one at all’, found a survey of small business owners by fintech Capital on Tap.

Respondents said they did not have an exit plan as they had an emotional connection to their businesses, which became even more pronounced among smaller businesses, affecting 35% of owners with fewer than five employees.

Another issue was finding a suitable buyer (28%), while legal complexities (24%) and difficulty in valuing the business (23%) were other concerns.

Rebecca Alford, chief financial officer at Capital on Tap said: ‘When you have invested so much into building a business, it is understandable that letting go can feel daunting.

‘But without a clear exit strategy, circumstances beyond your control - such as illness, burnout, or unexpected life changes could put you in a weaker position to negotiate sales, or force you to close your business entirely.

‘Ironically, the desire to retain control can ultimately lead to losing it. Planning early allows you the opportunity to define what a successful transition looks like on your own terms.’

Nearly half (47%) of the business owners said they had considered selling the business to a third party, citing the advantages being able to ‘completely walk away from the business’, along with potential for significant profits after the sale.

A just as popular choice was giving the business to a family member, considered by 46%. This strategy was far more popular among larger businesses with 74% of businesses with more than 50 employees considering this strategy.

Surprisingly, winding a company down without a sale was most popular among businesses that had operated for less than two years and companies with fewer than five employees. But this is likely down to the business failing to gain traction and owners deciding to bail out.

This trend is not limited to smaller companies, as 40% of established businesses operating for over 10 years had also considered dissolving the company.

The most common time to begin an exit plan is within the first three years of operations with 18% of businesses acting within this timeframe.

In spite of their intentions, many business owners never follow through, with one in five having never actioned an exit strategy.

Interestingly, 21% said they had never sought out professional advice on a sale or divestment of their businesses.

Rebecca Alford added: ‘Too often, business owners miss out on maximising the value of their business or face unexpected complications - simply because they haven’t been fully informed about how to develop an exit strategy tailored to their specific circumstances.’

The Capital on Tap survey of 250 small business owners was conducted in May 2025.