A new nationwide poll released today by Massachusetts Mutual Life Insurance Company (MassMutual) reveals that small business owners are doing a lot of things right but there’s room for improvement. The top findings of the research lend themselves to these five tips for today’s small business owners:
- Surround yourself with trusted advisors who have expertise and experience in succeeding the way you define success. Surprisingly, nearly 3 out of 5 (58 percent) small business owners in MassMutual’s research turn to their spouse as their trusted advisor for financial and business advice. While this is a positive sign, business owners should look to expand their pool of trusted resources beyond their spouse for diversity of expertise and experience.
- Know who your successor is – and prepare accordingly. This includes telling them. The good news is that 2 out of 3 (64 percent) business owners have a succession plan in place for their business– however, 1 out of 4 (25 percent) in line to take over a small business aren’t aware they are the chosen successor. Furthermore, nearly 3 out of 5 (58 percent) family-owned business owners intend to divide business assets up equally among all their childrenregardless of a child’s involvement in the business. This opens the door to a potentially difficult yet necessary conversation.
- Know the true value of your business. Nearly two out of three (63 percent) say they’ve had their businesses valued in the last three years. However, 1 out of 4 (25 percent) valued their businesses themselves, which may lead to unsubstantiated valuations.
- Do not put all of your eggs in one basket. While nearly two out of three (64 percent) say their business is their largest asset, this doesn’t mean it should be their “everything.” MassMutual’s research found that 1 out of 3 small business owners have no assets for retirement outside of the business – and 1 out of 4 (25 percent) said they would have to liquidate assets (business or personal) to meet any tax or fee obligations in the settlement of their estates.
- Take care of your key employees. Employee loyalty spiked as top of mind for more than half(54 percent) of the business owners in MassMutual’s research. Health care, flexible work arrangements and generous salaries topped the list of benefits offered to all employees. However, 1 out of 3 (30 percent) do not offer any special benefits to those they consider key to the success of the business.
“Most business owners prefer to keep their business and personal finances separate, but often find the two inextricably linked,” said Brian Trzcinski, director of business markets, MassMutual. “Since the last time we took a pulse check on business owners through a similar research study three years ago, we’re finding that protection planning for the business is continuing to become more and more top of mind, but the main thing holding business owners back is lacking the personal capability and/or not knowing what they do not know.”
To take the first or next step in helping business owners with foundational strategies like those listed above, MassMutual suggests visiting: go.massmutual.com/BusinessOwnerPerspectives
The 2018 MassMutual Business Owner Perspectives Study surveyed 914 business owners between December 13, 2017 and January 4, 2018. Respondents have 500 employees or fewer, been in business for more than a year and an annual revenue of $100K or more.