Welcome to our Unfolding the Key to Success report, which focuses on UK entrepreneurs – the people who make business happen, create jobs and generate wealth.
With Unfolding the Key to Success, we aim to shine a light on the myriad factors influencing entrepreneurs at different stages of their journeys. Whether a natural progression from an entrepreneurial family background, or a desire to move out of the corporate world, everyone has their own story to tell.
From inception to exit, we explore the experiences that define business founders and uncover the motivations that shape their ambitions at various stages of their entrepreneurial journeys.
We hope you enjoy the report.
Director, Head of Executives and Entrepreneurs
Arbuthnot Latham Private Banking
Our key findings
- Entrepreneurs consult a diverse ecosystem of trusted advisors
A business exit has important implications for entrepreneurs’ personal wealth and lives beyond – and those who have exited are approximately 7 times more likely to involve a private banker in the process than those who are yet to exit (29% vs 4% respectively). Despite strong intentions, only 19% say they had a plan in place to protect their wealth post-exit.
- There is a disconnect between expectation and reality when it comes to business exits
Entrepreneurs anticipate that when the time comes, the decision to leave their business will be personal – perhaps because they have reached a certain age or have stopped enjoying their role. In reality, they often end up exiting more pragmatically, because they have found a suitable successor to take their place.
- There is no such thing as a perfect exit process
Only 22% of entrepreneurs reported that they were perfectly happy with the way the business exit process went. 3 in 5 (59%) would have sold later or earlier; with others identifying factors such as finding the right buyer and gaining a better understanding of the risks involved as key considerations.
- Prior to an exit, founders usually believe they are stepping away for good
Yet 83% remain connected to their firms in some way – most commonly, as advisors or Non-Executive Directors. Almost two-thirds perceive this continued involvement to be stabilising for their former firms in the long-run.
- Most business founders do not retire in the traditional sense
92% continue their involvement with the business world in some capacity. The quest for time remains elusive, as many find themselves channelling their expertise and capital into mentoring, angel investments and philanthropy.
How do you compare?
Do you consider your business part of your overall investment strategy?
You are in good company. 60% of HNW UK entrepreneurs agree, climbing to 72% when those entrepreneurs come from a family business background.
I take my business into account when making investment decisions, but it is not part of my overall strategy
You carve your own path. Only 17% of entrepreneurs chose this option, reducing to 12% of those who come from a family business background.
Are you a first time entrepreneur? 35% of first time entrepreneurs view their business as distinct compared to only 16% of entrepreneurs from a family background.
Thinking about your personal motivations, which of these best describes why you became an entrepreneur/business owner?
This was the most popular option among the entrepreneurs we surveyed too, with 23% stating this was a key motivation.
For many, the desire to move away from the corporate world was as strong pull with almost 1 in 5 choosing this option (17%).
Providing for others was a key motivator with 15% of entrepreneurs putting the needs of their loved ones first.
Entrepreneurs are certainly not short of passion, with 10% of entrepreneurs motivated by following their dreams.
What activities do you/did you anticipate undertaking to prepare the business for an eventual transfer of ownership?
Interestingly, almost twice as many entrepreneurs intended to put a plan in place (37%) compared to those that did in reality (19%).
Timing is seen as key with half of entrepreneurs who exited identifying this as a key element (49%). However, 27% and 23% respectively said they would have waited longer or sold earlier.
Valuation is understandably a key factor; 35% of those yet to exit identified this as important, rising to 52% of those who have exited.
We found entrepreneurs had solid intentions to put wealth protection plans in place (35% of those yet to exit), however only 13% managed to do this.
Restructuring is seen as a key activity by more than a quarter of entrepreneurs who have gone through this process (27%).
Interestingly, double the number of those who have exited their business refinanced in preparation of sale (31%), compared to those yet to sell (15%).
Which of the following business roles do you anticipate being involved in after you have exited your business?
2 in 5 (43%) entrepreneurs intended to cut the cord, yet it’s easier said than done with 92% of entrepreneurs remaining connected post-exit.
About a quarter (28%) of entrepreneurs anticipated mentoring, yet 2 in 5 (44%) provide this service post exit.
Only 1 in 5 (20%) entrepreneurs anticipated taking on a C-Suite role in another company, yet almost half (47%) made this move post-exit.
Despite relatively low expectations of investing into another business (18%), 30% of entrepreneurs became angel investors. Read the report to find out how successful they were.