Fifteen per cent of small business directors are aged over 66, as many fail to sell their businesses before their planned retirement.

And 10 per cent of directors of UK SMEs are aged over 70.

Accountancy firm BDO analysed 730,000 directors on the boards of UK SMEs and discovered 113,000 are still working beyond the traditional retirement age.

Some are working for longer than hoped as their plans to exit have not yet come to fruition. BDO says lack of a well-planned exit strategy can impact business profitability.

BDO says that it takes on average nine months to sell a sub-£25 million business, which is much longer than some entrepreneurs expect.  If an owner is required to restructure a business to make it more attractive to buyers, it can potentially take much longer. Significant organisational change takes time to implement and means it may be years before a business is in a position to be sold, says the accountancy and business consultancy.

By not sufficiently planning ahead, many directors are also forced to sell their business at a lower price than they originally planned for. Handling and planning the sale well in advance of the planned date of retirement can ensure owners get the best possible price for their business, BDO recommends.

Mark Lamb, business advisory partner at BDO, said: “Many directors face working well into their seventies and that’s not always out of choice but because they have failed to sell their business.

“Businesses can really benefit from retaining the expertise of their most senior directors, but most would prefer to do that through a non-exec or consultancy role.

“If a business owner can’t transition out of a company, then the years of building up a business to enjoy a comfortable retirement can actually end up with a director working well into that retirement. An exit strategy should be part of an owner’s business plan even from the beginning.

“Owners can risk losing value in their business when they go to sell if they have not sufficiently planned things in advance. Planning allows for any unexpected bumps down the road and ensures they get the sale price they are looking for to have a comfortable retirement.”