Challenges to business growth
In response to the cumulative impact of increased federal, state and local taxes, business owners have taken a variety of actions including: reducing or limiting staff (26 percent); moving the business to a state with lower personal income tax rates (18 percent) or state with lower costs (15); and eliminating or reducing the provision of healthcare benefits (18 percent).
One in 10 business owners (11 percent) have sold or intend to sell the business, including 16 percent of those who have an annual household income greater than $1 million.
Few established business owners cited access to capital or credit as a top challenge to growing their business. Among business owners surveyed, 84 percent said that getting a bank loan and 88 percent said access to investment capital has not held them back from growing their business. Nearly two in five owners (19 percent) have increased their investment in the business or increased borrowing as a result of increased taxes.Balancing act: Managing personal and business finances and responsibilities Insights on Wealth and Worth found that people who own their own business have significantly higher annual household incomes than other high net worth households. Seventy-seven percent of non-retired business owners surveyed have an annual income greater than $200K and 26 percent earn $1 million or more, the majority of whom are young entrepreneurs under the age of 49. By comparison, 59 percent of non-retired, non-business owners have an annual income greater than $200K, and only 9 percent earn more than $1 million a year. Business owners, especially baby boomers, are typically the wealthiest in their family of origin. As a result, they tend to take on responsibility for the well-being of extended family members, more so than non-business owners. U.S. Trust found that most business owners do not have a financial plan that accounts for this.