Selling Your Business: The age of the young entrepreneur

THE traditional make-up of the entrepreneur is changing, with younger moguls increasingly more likely to be buying and selling businesses, wealth managers have said.

All this week, TheBusinessDesk.com, in association with Coutts and Higgs & Sons, is looking at the pros and cons of selling a business and whether now is the right time to act.

Jennifer Crowley, client partner at Coutts in Birmingham, said: “The entrepreneurial spirit is still alive and well in the Midlands. While the number of businesses we have seen being sold this year are well below the levels seen at the height of 2007 and start of 2008, we have seen increased activity in this space.

“We have also noticed an overall change in demographics for entrepreneurs and have seen an increase in younger entrepreneurs exiting businesses, particularly those involved in IT and internet-based businesses, as well as waste and renewable energies.”

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She said with changes in dynamics, these younger entrepreneurs were more likely not to ‘hang up their boots’.

“They will still potentially upgrade their main residence, purchase a property abroad and buy the luxury assets they have always dreamed of. But, we are seeing entrepreneurs who are exiting their businesses and then setting aside a ‘war chest’ to look for further business opportunities,” said Ms Crowley.

She said inflation remained a prime concern for high net worth individuals, especially with the low interest rate environment likely to be sustained for much longer than originally anticipated.

Therefore, while current inflation rates are around 5%, many of these investors have seen their personal inflation rate grow to around 8% to 10% due to their lifestyle, which often includes private school fees and luxury holidays.

“With increased life expectancy, our clients recognise that in the current economic environment holding cash is not a viable strategy for managing their long-term wealth, when looking to maintain their real net worth in the future.

“Residential and commercial property may offer better protection and maintain its value relative to the cost of capital and prices in general if held for more than five years,” she said.

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