- The top reason business owners gave for wanting to start or own their own business is the desire to control their own destiny (60 percent).
- Younger business owners (79 percent of Gen Y and 54 percent of Gen X) are notably more likely than those who are older (35 percent) to feel that business ownership empowers them to make a positive impact on society.
- Business owners believe that by owning a business, they are more likely than people who work for someone else to be fulfilled in their work (72 percent), create significant wealth (67 percent), provide financial security for their family (66 percent) and create opportunities for others (58 percent).
- Ninety-five percent of baby boomers are the first generation to own their business, compared to three-quarters of younger business owners. One-quarter (25 percent) of owners under the age of 49 represent the second- or third-generation owners of a family business.
- The biggest challenge business owners cited in being able to grow their business is the impact of taxes.
Challenges to business growthIn 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.
More than half (53 percent) of business owners provide, or have provided, substantial financial support (not a loan) to other adult members of their family, including their parents, grandparents, siblings, nieces and nephews.
- Business owners are less likely than non-business owners to financially support adult children but are more likely to support other adult family members.
- Fifty-seven percent of business owners do not have a financial plan that accounts for financial support needed by other adult family members.
- Forty-four percent of business owners, compared to 31 percent of non-business owners, expect to financially support their parents or in-laws at some point.
- Thirty-five percent of business owners, compared to 21 percent of non-business owners, indicate that they have forfeited income or advancement of their career in order to care for the special needs of children or parents.
- Seven in 10 business owners (71 percent) agree that the needs of the business often take priority over their own personal needs and obligations, and approximately one-half (52 percent) focus more on the finances of the business than on their personal finances.
- More than half (53 percent) of business owners say that minimizing the impact of taxes is an important factor in their investment decision-making; however, approximately four in 10 percent do not feel very well informed about the impact of tax increases on either their investment returns or income.
- While three-quarters (78 percent) of business owners founded or co-founded their business, only 18 percent of baby boomers and 27 percent of business owners over the age of 68 intend to pass their business on to the next generation. Most plan to sell the business or close it when they are ready to leave, suggesting that a majority of next generation entrepreneurs are, or will, pursue business ownership on their own or with inherited family wealth.
- At least one-half of young business owners, including 60 percent of millennials, have a formal succession plan to ensure the continuity of their business, compared to 34 percent of baby boomers and 44 percent of business owners over the age of 68.
U.S. TrustU.S. Trust, Bank of America Private Wealth Management is a leading private wealth management organization providing vast resources and customized solutions to help meet clients' wealth structuring, investment management, banking and credit needs. Clients are served by teams of experienced advisors offering a range of financial services, including investment management, financial and succession planning, philanthropic and specialty asset management, family office services, custom credit solutions, financial administration and family trust stewardship.U.S. Trust is part of the Global Wealth and Investment Management unit of Bank of America, N.A., which is a global leader in wealth management, private banking and retail brokerage. U.S. Trust employs more than 4,000 professionals and maintains 140 offices in 32 states. As part of Bank of America, U.S. Trust can provide access to a broad range of banking solutions for individuals and businesses, and an extensive retail banking platform. Bank of AmericaBank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. We serve approximately 51 million consumer and small business relationships with approximately 5,300 retail banking offices and approximately 16,350 ATMs and award-winning online banking with 30 million active users and more than 13 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.