(The following article is the first in a series, based on a new survey of 603 small business owners with total personal net worth of more than $7 billion, which examines their financial lives, their use of financial products and services and their relationship with their financial advisors.)

Small businesses are often credited with being the engine that drives America, not only as a wellspring of innovative ideas but also as an important source of job creation and GDP growth. Further, according to our recently completed study of small business owners, their individual wealth is anything but pint-sized: The 603 respondents in our new survey had an average net worth of $11.7 million.

In addition to being wealthy, small business owners have a checklist of special financial needs that sets them apart, ranging from business succession plans to more esoteric offerings such as key-person insurance and buy/sell arrangements. Just as importantly from the financial advisor's perspective, our research showed that many of these needs are unaddressed: Estate plans are sorely outdated, succession plans are unfinished and asset protection plans are incomplete. Given the assets in play and the financial issues unresolved, this is clearly a segment that bears scrutiny.

Defining Small Businesses

According to the U.S. Small Business Administration, a small business is broadly defined as one with no more than 500 employees for most manufacturing and mining industries and with no more than $6 million in annual receipts in nonmanufacturing industries (though there are many caveats and exceptions). The SBA reports that there were 22.9 million such businesses at last official count (in 2002). Those businesses account for 40.0% of the nation's private sales and 99.7% of all employers. They employ 50.1% of the private workforce and produce approximately 75% of new jobs that are created. They are, in sum, a powerful economic force.

Family Versus Corporate Businesses

To learn more about the people who own these businesses, we recently conducted a survey that asked 603 of America's small business owners about their primary business and financial concerns. Other issues explored in the survey included the financial products they use-and ones they want to use down the road-how they found their financial advisor and where, as well as their interest in specific financial products such as planned gifts, estate plans, succession plans, asset protection plans and key man insurance.

In our study, there were two kinds of small businesses: family-owned small businesses, which accounted for 387 of the respondents in our study, and corporate small businesses, which accounted for the other 216.

A family business is defined as one:

That has one or more family members employed in senior positions;

Where multiple generations are (or have been) involved in the business;

Where the family has majority ownership; and

Where the family wants to maintain majority ownership.

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