Re-investment beats early retirement as plan for this year’s profits

Most British bosses would re-invest in their companies, according to new research from Abbey Business Banking. The study, which asked Britain’s SME bosses what they would do with their 2007 profits should they exceed their targets this year, found that over half of them (57 per cent) would re-invest the money in the business.

However early retirement is a close second with 48 per cent of British bosses saying that they’d use the profits to enjoy the ‘good life’ a little earlier. 18 per cent would use the money to take an early retirement immediately while 30 per cent would invest elsewhere to create an early retirement fund. A further 29 per cent would spend any excess profits.

Industry breakdown

Those in the agriculture and mining industries (81 per cent) were most likely to invest in the future of their business, whereas those in transport and communication were least likely to invest (40 per cent). Equally the biggest spending bosses came from the manufacturing industry (41 per cent).

Scottish bosses were most likely to reinvest profits into the business (86 per cent), while those in the South West (41 per cent) were most likely to spend any windfall. Londoners were most likely (54 per cent) to invest windfalls elsewhere for an early retirement.

Ian Wilson, managing director of Abbey Business Banking, commented: “Britain’s bosses are an entrepreneurial lot with nearly three-in-five of them planning to put this year’s profits to good use by investing in the future of their business. However, early retirement too is a popular home for profits, with nearly half of those questioned using excess profits to bring forward the day that they can pack it all in and enjoy the fruits of their labour.

“Abbey Business Banking is aimed at small to medium business owners. Unlike other banks, Abbey helps business owners maximise their profits by offering free day-to-day banking. We also help them run their businesses efficiently by offering 24-hour online banking for round-the-clock access to their accounts. Abbey has been rated top out of all business banks for on-line banking customer satisfaction by Finaccord’s Small Business Metrics Survey.”