The 2017 U.S. Trust Insights on Wealth & Worth® survey examined the journey of business ownership, including four key areas: how business owners fund their companies; the strategies and challenges of growing a business; exit planning; and the ways in which business owners contribute to the greater good. Survey results illustrate a need for additional planning among business owners, particularly in their exit strategies.



Business owners employ a variety of strategies to fund their companies. A clear majority (nearly 70%) start their businesses using solely personal or family resources, including savings, inheritances, and loans from family, a bank or a credit card.

Most business owners share ownership of their business ventures; three-quarters have co-owners, partners or outside investors. Four in 10 co-own a business with family members, with Millennials most likely to be part of a family enterprise (53% vs. 41%).

How do founders feel about their financing strategies in retrospect? Close to half (48%) say they would recommend a different mix of funding sources. Whereas nearly seven in 10 relied solely on personal resources, only about half (49%) would recommend that strategy now. Thirty-four percent recommend a combination of personal and outside resources—double the number of those who actually used such a mix.

Funding a business is a challenge across the board—obtaining seed capital tops the list of start-up challenges for founders (25%) (see Figure 1), while Millennials say the chief challenge is protecting personal wealth from business risks (20%).


Business owners are in growth mode—nearly half plan to increase employment levels this year, and over half aim to increase wages and compensation. Seventy-nine percent are increasing or maintaining capital expenditures.

Sixty-two percent of owners overall—and 87% of Millennial owners—are also planning a deal within the next three years (see Figure 2). Notably, close to one-quarter of Millennial owners are considering an IPO, and more than four in 10 are contemplating a merger or acquisition.

During the growth phase, attracting and keeping talent is the biggest challenge owners face (34%), followed by managing cash flow (26%) and keeping up with technology and market trends (24%).

As a business grows, certain concerns are more likely to keep owners “up at night.” Small business owners are most likely to focus on compliance issues, while owners of middlemarket companies ($10 million to $100 million in revenue) and large corporations ($100 million+) are more worried about economic uncertainty and potential downturns.


More than half (52%) of all business owners—and, surprisingly, 65% of Millennial owners—plan to exit their current business within the next three years.

Despite having plans for the future of their businesses, a majority of owners (69%) have not crafted a formal exit strategy. Nor have they prepared for potential negative events. For example, 84% don’t have a plan in case of a decline in their own cognitive capacity. Eighty-three percent aren’t prepared to handle a substantial labor or wage lawsuit. Seventy-four percent aren’t equipped to manage a sudden business downturn.

Despite the fact that protecting their personal wealth from business liabilities is among the top concerns for business owners—and the number one challenge for Millennials—at least seven in 10 owners have not taken important steps that could help ensure their business or personal assets are safe (see Figure 3). Only about half of all business owners—and even fewer Millennials—have taken precautions with basic protections such as umbrella insurance policies, durable power of attorney or life insurance trusts.


Business owners demonstrate a characteristic, strong commitment to philanthropy and dedication to making a difference in a variety of ways.

Business owners are keenly aware of the role they play in, and the impact they can have on, society. Nearly four in 10 business owners think small businesses and start-ups are the most effective engines of growth and economic opportunity. Close to one-quarter of owners are social entrepreneurs with a mission to provide solutions for key social and environmental issues.

Forty-three percent of owners see their businesses as one way of giving back, by making a positive and meaningful difference through creating jobs and opportunities for others (see Figure 4). Almost one in three invests in companies based on positive impact.

Commitment to philanthropy runs in the family, with seven in 10 business owners coming from a family with a tradition of philanthropy, compared to 43% of non-entrepreneurs. Ninety-five percent of them actively support nonprofits, and more than half serve on one or two nonprofit boards, showing business owners’ desire to be actively involved in the community.



The Mindset of an Entrepreneur


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Neither U.S. Trust nor any of its affiliates or advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

Study Methodology: The 2017 U.S. Trust Survey of HNW Business Owners is conducted as part of the 2017 U.S. Trust Insights on Wealth and Worth® survey, a nationwide survey of 808 high-net-worth and ultra-high-net-worth adults with at least $3 million in investable assets, not including the value of their primary residence.

U.S. Trust surveyed 248 business owners, including 190 current owners and 58 retired owners. All respondents own or owned businesses with annual revenues of $1M to greater than $100M. U.S. Trust commissioned the independent research firm Phoenix Marketing International to conduct the survey and compile findings. The double-blind survey was administered online over a six-week period, beginning in January and completed in February 2017. Quotas were established by age and investable asset size and specified for business owners in order to ensure sufficient representation of groups of interest.. The final sample was weighted to the true representation of high-net-worth households by age, asset level and business ownership and are not representative of U.S. Trust clients. Asset information was self-reported by the respondent. Verification for respondent qualification occurred at the panel company, using algorithms in place to ensure consistency of information provided, and was confirmed with questions from the survey itself. All data have been tested for statistical significance at the 95% confidence level.

U.S. Trust operates through Bank of America, N.A., and other subsidiaries of Bank of America Corporation. Bank of America, N.A., Member FDIC.

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Media Contacts:

Sue McCabe
Julia Ehrenfeld

To learn how U.S. Trust works with business owners, please contact:

Karen Reynolds Sharkey
National Business Owner Strategy Executive
212.852.3379
Email
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