A corporate business, in contrast, is one:
Where leadership is not drawn from the same family;
Where multiple generations are not involved in the business;
Where the family does not have majority ownership; and
Where there is no succession plan.
Our Research
Now let's look at some of the demographics of the small business owners in our study. First, as you can see in Exhibit 1, all of the businesses-primarily in manufacturing, services, retail, and wholesale-fell well within the SBA's definition, averaging 116.7 employees and almost $32 million in sales annually (Exhibit 2).
When it came to leadership, about two-thirds of the CEOs and presidents were men (Exhibit 3). The corporate small businesses were somewhat more likely to have a woman in charge than family small businesses.
On average, the small business owners in our survey were almost 55 years old, which puts them squarely in the baby boomer generation (Exhibit 4). That is significant from the advisor's standpoint, of course, because it means they are facing, or about to face, crucial financial decisions such as their own retirement, the death of their parents and-a crucial issue for family small businesses-business succession. Indeed, as we shall see, the issue of who's going to take over the family business is one that is paradoxically both top-of-the-mind and seldom seen to; family business owners know they have to address the issue but they put if off for as long as possible.
Assets And Net Worth
Based on both their investable assets and total net worth, it's easy to see why small business owners are attractive as both clients and prospects. Their discretionary investable assets were on average more than $1.5 million and their total net worth, including the estimated value of their share of their businesses, was nearly $12 million (Exhibits 5 and 6). That adds up to a total net worth of more than $7 billion for the 603 small business owners in our study.
The next question of course, given those sizeable assets, is how many investment advisors do they have on board to manage their personal finances? The answer: about two each (Exhibit 7).