Over 1.8 million jobs are at risk as 370,000 small businesses plan to cease trading over the next five years, according to a survey commissioned by business for sale marketplace, Bizdaq.
The research, conducted by Opinium, found that a further 424,000 business owners plan to exit their business by selling within the next five years; selling being a method which is far more likely to protect jobs.
Of the 1.8 million jobs that could be affected, 370,000 of those will be within the next 12 months, as small business owners start to cease trading.
The survey found that business owners in London are most likely to be thinking about an exit within the next five years. Forty-three per cent of London’s small business owners are considering an exit, whilst those in the East of England are happiest running their businesses with only 11% of owners considering exiting.
Interestingly the revenue of businesses didn’t have an impact on whether an owner was planning to leave – the East of England had both the lowest exit rate and the lowest average revenue, whilst the East Midlands – which had the highest average revenue – was second only to London for business owners looking to exit.
Small businesses still not sure about Brexit
Despite the EU referendum edging closer small business owners across the UK are still split on the subject of whether to Brexit or not – 41% answered that the UK should stay, 44% answered the UK should leave, and 15% said they are still undecided.
The region most likely to support staying was Wales with 53% of respondents saying the UK should remain, whilst the North West is most likely to support leaving, with 59% answering that the UK should leave.
It also revealed that small businesses with a higher revenue were more likely to want to stay in the EU. The average annual revenue of those wanting to stay was £93,000 compared to those wanting to leave at £84,000 – a £9,000 difference.
The industries most likely to support the Brexit were the hospitality, construction and professional services industries, whilst those in education, IT and wholesale want to stay.
Sean Mallon, CEO of Bizdaq, said: “It is astonishing, given the government’s rhetoric around job creation, that little is being done to preserve the number of jobs at risk within Britain’s small businesses. If the government were to make leaving a business easier and promote this as the “norm”, then hard working small business owners could capitalise on their efforts and we could retain over 1.8m jobs – it’s a win-win situation.
“It is clear that Britain’s small business owners are relatively undecided as to whether it’s “better the devil you know” and remain in the EU, or whether their business would actually benefit from less EU regulation and more state control. It seems the larger the business, the more EU trade they are likely to have and there seems to be a correlation with these companies wanting to remain in the EU.”