Most business owners (60 percent) believe their company will continue running successfully after they leave, according to a survey by Merrill Lynch.
But only 35 percent are confident in their ability to meet their personal financial and life goals using their current wealth management strategy if they had to stop running their businesses today, the survey revealed.
The Merrill Lynch Affluent Insights Survey: Business Owner Spotlight included 250 business owners with revenue of $10 million to $250 million a year.
If forced to retire today, half of the business owners say they would choose a current employee to take over, while 24 percent would select a family member. Another one in five would hire someone from the outside.
The business owners’ greatest concern if they had to retire today would be financial management of the firm, leadership succession and business development and growth, according to the survey.
Despite their concerns, only 39 percent of business owners have worked with a management consultant, personal financial advisor or commercial banker to develop a succession plan. In addition, one third of those surveyed have not worked with a personal financial advisor or commercial banker to prepare their personal finances for a time when they will no longer be actively managing the company.
“A transfer of ownership or management could happen on a timeline as planned, or come as a result of sudden or unforeseen circumstances,” say John Thiel, head of Merrill Lynch wealth management.
“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,” he adds.
Despite the lagging economy of recent years, more business owners have hired people (30 percent) over the past two years than have laid employees off (22 percent).
Looking to the future, business owners see their best chance for growth in introducing new products (24 percent), taking advantage of new technologies (24 percent), targeting new kinds of customers (21 percent) and expanding domestic locations (21 percent).