DES MOINES, Iowa — New research shows American business owners focus on the present with no long-term plan to exit or transition their business. The Principal Financial Group surveyed business owners about their priorities during the current economic recession.
The study, which surveys small- to medium-sized business owners with 2-500 employees, is released by the Principal Financial Group and conducted by Harris Interactive.
Among those surveyed, nearly seven out of 10 owners (66%) report they do not have an exit plan to transition their business in the event of death, disability or retirement. Instead, owners focus on growing their business (70%) followed by achieving business stability and remaining active in the business after retirement (both 47%).
“Recent market events have forced most people to reassess financial priorities, but the task looms larger for business owners who must take stock of their personal and business needs,” said Steve Parrish, national advanced solutions consultant for the Principal Financial Group. “Many owners said their retirement plan is to never retire, while others plan to fund retirement by selling their business. By not developing a plan to exit their business, they leave it vulnerable to be sold for less than it’s worth, creating a negative financial impact for themselves and their family.”
Desires vs. Reality
The findings also indicate business owners’ stated priorities often do not match their actions.