By not anticipating risks or a change in circumstances, they unintentionally may put the financial security of their families and employees at risk, despite their best intentions.
San Francisco, CA (PRWEB) November 26, 2012
A recent survey released by U.S. Trust Bank of America Wealth Management shows small business owners feel they have the responsibility and the ability to create jobs and opportunities for others. The 2012 U.S. Trust Insights on Wealth and Worth Survey showed that while entrepreneurs are often focused on helping others, they can also neglect steps that protect their future financial security, as well as that of their family, employees and even their business.
“Some of the most successful business owners and entrepreneurs in history have been driven by a desire to change the world and improve the lives of others,” said Keith T. Banks, president of U.S. Trust. “The country was founded on that spirit of entrepreneurism, and it is a tremendous engine of economic growth and prosperity. Yet many business owners are so caught up in what they are doing that they often don’t envision a world without them in it. By not anticipating risks or a change in circumstances, they unintentionally may put the financial security of their families and employees at risk, despite their best intentions.”
The survey results showed 72 percent of business owners feel they are responsible for job creation, and furthermore, 76 percent feel it is their responsibility to retain their employees even if it means lower business profits. In addition, two-thirds of those surveyed said they have the ability to create opportunities for others.
Roughly half of those surveyed have either started or expanded their business since 2008, while 55 percent said they are delaying because of concerns over the economy and business regulation. Only 28 percent responded that they haven’t grown because of access to credit and 15 percent have been held back due to the lack of availability of startup funding.
The survey consisted of responses from over 600 high net worth business owners, and found that business owners generally have more wealth and higher incomes than non-business owners. Ironically, though the majority of respondents felt a need to employ others and create opportunities, the survey found that many business owners have insufficient personal financial plans.
55 percent of those surveyed did not have a succession plan for their business, including 43 percent who were over the age of 67. While 77 percent said it was important to leave an inheritance to their children and grandchildren, 60 percent of those surveyed have no comprehensive estate plan. Even though 46 percent have begun to transfer assets into trusts, an additional 48 percent are not using any form of trust to transfer or protect their assets. The leading reason, cited by 42 percent of respondents, is that they simply haven’t gotten around to it yet.
With such a strong focus on growing their business, it is apparent that many business owners fail to spend time on their own personal finances and future plans. Small business owners should realize that they will not always be around, and with the business being the major source of income and wealth for their families, they need to take steps to ensure that future generations are taken into consideration.
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