More than a quarter of micro-business bosses say they will wind the company up when they retire instead of selling or passing it on to new managers.

That’s according to new research involving 500 entrepreneurs by Bibby Financial Services. It showed that 26 per cent plan to simply close the business down; meaning 1.2 million businesses currently operating could end their tenure this way.

There are around 4.7 million businesses in the UK with between one and nine employees. These micro-businesses make up 95 per cent of all small-to-medium firms in the country.

“There’s a common assumption in the UK that all businesses have aspirations to grow significantly; to expand into larger entities with higher staff numbers, increasing turnover, larger premises and increasing output,” said David Postings, CEO of Bibby Financial Services.

But, he added: “Many small businesses and their owners are motivated and interested in surviving; paying mortgages and earning a living for themselves and their families.”

Around two in 10 of the small businesses turnover less than £20,000 a year, with 40 per cent achieving between £50,000 and £100,000 in sales.