Six out of ten SME owners have no succession plan, according to a survey by Investwise, and female owners are less likely to have such a plan.

The firm's SME Succession Survey shows that 42% of those who have not planned for succession do not intend to put such a strategy in place. only one in six said that they will develop a succession strategy, while 42% said that they might.

The survey conducted by iReach gathered 370 responses from decision makers within SMEs/family-run firms.

Investwise managing director David Quinn (pictured) said: “SME owner-managers pour their heart and soul into their businesses. Protecting a business legacy and creating a strong path to future success for the next generation are too important to leave on the long finger."

Investwise estimates that three-quarters of private businesses are family owned, and lack of effective succession planning is one of the main reasons why many family businesses fail to survive to the second generation. Research indicates just 30% of family business transfer successfully from one generation to the next.

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Reasons given for not developing a succession plan included lack of understanding or knowledge of what is required and not knowing where to start (22%), day-to-day business operations being all-consuming (19%) and the challenge of balancing family versus business interests (12%). One third of respondents said succession is not a priority as it is a long way off in the future.

Among the 40% who have planned for succession, 63% of men have included a pension as part of their future business strategy versus just 43% of women.

Established in 1988, Investwise Financial Planning advises 300 clients with a funds under management value of €140.