Ten-Year Test for Owners Keeping a Profitable Business
A profitable owner-run business should be kept open only when the value of holding it exceeds the tax, effort and succession costs of staying.
| By | The Long Game — Newsroom |
|---|---|
| Filed | 5 October 2026 |
| Read | 3 MIN |
You have a profitable owner-run UK business, and the decision is whether to keep it open or plan a deliberate exit. The ten-year view matters more than the latest profit line.
By 3 October 2026, at least 901 solvent owner-run UK firms had closed in the previous 12 months, split into 543 solvent liquidations and 358 voluntary strike-offs. Their median EBITDA was £122,000, and their combined latest-accounts EBITDA was £236m, with 44 of them earning more than £1m.
The age pattern is the warning. In the solvent-liquidation group, 57% had an owner aged 60 or over and 19% had an owner aged 70 or over, versus 38% and 13% among 124,521 comparable owner-run businesses still trading. The company can keep earning while the owner reaches the point where continuing is a default, not a decision.
Profit is the wrong exit trigger
A healthy profit line shows the company can pay its bills. It does not show whether the owner is being paid enough for the risk, time and capital tied up in the company. A profitable company can still be a poor holding if the owner is funding a lifestyle that stops compounding, carrying a structure that makes exit expensive, or ageing into a role no successor can absorb.
Staying open has a price. It includes the tax drag on retained profits, the owner’s hours, the risk of being the only person who can keep it running, and the succession question that gets harder every year. The accountant’s invoice and office rent are visible; the owner’s trapped time is the less visible cost.
The cost of staying is a real price
Tax can change the arithmetic of a deliberate wind-down. From April 2025, qualifying distributions in a solvent liquidation and share sales both qualify for Business Asset Disposal Relief, a tax relief, at 14%, rising to 18% from April 2026. A formal solvent wind-up can be a cleaner route than a slow sale or a passive continuation, especially when the owner wants to lock in value rather than keep funding the company.
March 2026 recorded 2,067 UK Members’ Voluntary Liquidations, more than the 472 recorded across all of 2021. The national count is not a smooth trend. Solvent UK wind-ups had risen 14-fold since 2021, with monthly spikes tied to the October 2024 Reeves Budget, the March 2025 tax year-end, and the April 2026 BADR increase. National solvent liquidations fell 31.9% to 8,569 in the year to March 2026.
Closing a profitable business can feel like surrendering value. Profit and owner value are different. A company can generate cash while the owner’s net position declines because the cash is trapped, taxed, or consumed by effort.
Run the holding test before you default
Write the sides down. Do not ask whether the business is doing well. Ask whether the owner is better off holding it for the next stretch of years than taking a deliberate exit now.
- Tax: what you would pay to keep profits in the company, take them out, or exit now.
- Effort: the hours, risk and management burden you are actually carrying.
- Succession: whether a buyer, family member or management team can take it without destroying the value.
- Holding value: the realistic growth, compounding and optionality you would lose by exiting.
Strong holding value supports staying. Mostly inertia supports a planned exit. The exit can be a planned conclusion on a ten-year view.
For an older owner, succession is often the decisive line. A business that depends on a single person’s presence is harder to hold, harder to sell, and harder to retire from. The owner should ask whether the next buyer would pay for the business as a going concern or only for the owner’s personal network.
A business that generates cash but traps the owner’s career may have negative holding value. One that compounds may make the cost of staying worth paying.
Run the test annually, not only at retirement. The same business can pass in one year and fail the next if the owner’s time, the tax position, or the succession path changes. The owner should make the exit call deliberately rather than by default.