The Covid crisis has pushed many wealthy business owners to hasten retirement and speed up succession plans, according to research by wealth manager and multifamily office Clarfeld | Citizens Private Wealth.

The "Success and Succession" study, which looked at the impacts of Covid on business decision making among high- and ultra-high-net-worth business owners, found that two-thirds reported that the pandemic accelerated plans to retire or sell their business.

The online study, conducted by Ipsos in July, surveyed 150 business owners with 2,500 employees, a net worth of about $2 million to $10 million and investable assets of more than $5 million.

The research found that, due to the pandemic, 21% of wealthy business owners applied for loans through the Paycheck Protection Program, 21% closed branches or satellite offices, 19% laid off employees and half of wealthy business owners planned to sell their businesses.

Further, it found that 70% of respondents planned leadership changes due to the pandemic-driven challenges. It also noted that 34% of respondents retired early and 35% accelerated their succession plans.

Most of the business owners (88%) plan to leave their businesses to a family member, including spouses, children and grandchildren. Many are confident (89%) that the next generation will be a successful steward of their business, the survey found.

And the next generation have become more welcoming of the opportunity to carry on the family business. The survey found that 21% of children or grandchildren who were previously uninterested in succeeding their predecessors are now on board with taking over the family business.

“Succession planning is a hugely crucial consideration for business owners looking to provide seamless continuity, especially in a volatile period,” Joannie Bozek, director of trust services and chief fiduciary officer at Clarfeld, said in a statement. “With the counsel of a trusted advisor, bringing family members and potential successors to the table for these conversations ensures accountability, interest and ultimately, a smooth transition when the time comes."

Wealthy business owners also had relocation on their mind as they weathered the challenges. Clarfeld found that, as of March 2020, 65% of respondents moved their businesses. Among those who made the move, 34% wanted to switch to lower-tax states, 31% wanted to be closer to family and 27% wanted to take advantage of the flexibility that comes with remote working.

Three-quarters of respondents see themselves moving their business in the next three to five years. The survey said 80% of business owners operated their businesses either fully remote or hybrid in-person and virtually throughout the Covid crisis.

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