Sixty percent of business owners are confident their business will continue to be successful after they retire, according to findings from the Merrill Lynch Affluent Insights Survey: Business Owner Spotlight, announced today. However, only 35 percent of business owners with $10 million to $250 million in revenue said they are very confident in their personal wealth management strategy’s ability to meet their financial and life goals if they were to stop running their business today.
Additionally, only 39 percent of business owners worked with a management consultant, personal financial advisor, or commercial banker to develop their succession plan. Similarly, many business owners have not worked with a personal financial advisor and/or commercial banker to prepare their personal finances for possible scenarios in which they will no longer be actively running their business (33 percent).
“The best succession planning strategies evolve and require frequent evaluation. A transfer of ownership or management could happen on a timeline as planned, or come as a result of sudden or unforeseen circumstances,” said John Thiel, head of Merrill Lynch Wealth Management. “That means business owners must take a holistic view of both personal and business finances. It is important that business owners are prepared for a variety of situations, not only so their business can seamlessly continue running after a transition, but also so their personal finances can continue to support their financial and life goals.”
When asked who they would trust to take their place if they were forced to stop running their business today, half (51 percent) of business owners would choose a current employee, followed by a family member (24 percent). One in five (21 percent) however stated they’d have to hire someone from outside their business. If someone were to take over their company today, business owners would be most concerned with financial management (23 percent), leadership succession (20 percent), and business development and growth (16 percent).
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