transition out of their businesses â preparing written plans, ... Here's what the 2015 Principal Financial Group® Bus
BUSINESS OWNERS:
BUSINESS CONTINUATION Business owners have a lot to consider when planning to successfully transition out of their businesses — preparing written plans, determining the value of their businesses and funding buy-sell agreements. Here’s what the 2015 Principal Financial Group® Business Owner Survey found.
DID YOU KNOW?
OVER A QUARTER OF BUSINESS OWNERS
26%
DON’T EXPECT TO RETIRE. EVER.
20%
PL AN TO RETIRE WITHIN THE NEXT FIVE YEARS
59%
of owners
THE BASICS FORMAL BUSINESS CONTINUATION PLANS
DON’T HAVE
A WRIT TEN BUSINESS CONTINUATION PL AN for death, disability or retirement.
YET,
PLAN REVIEW
A WRITTEN BUY-SELL AGREEMENT helps
82%
create an action plan — for an unexpected or planned exit.
ABOUT THEIR EXIT STRATEGY.
GOOD NEWS! Of the owners with written plans, more than half have had them reviewed in the past two years.
are either
SOMEWHATOR VERY CONFIDENT
52% WITH PLANS HAD REVIEWS IN THE PAST TWO YEARS.
FUNDING OPTIONS FOR WRITTEN PLANS
THE TOP THREE FUNDING VEHICLES for owners who have written plans in place are:
49%
44%
BUSINESS CASH FLOW
LIFE INSURANCE
17%
DISABILITY BUY-OUT INSURANCE Note: Only 8% use an Accumulation Sinking Fund.
BUSINESS VALUATIONS
68%
OF OWNERS HAVE NEVER HAD THEIR BUSINESS VALUED.
41%
of owners
PAID $5,000 OR LESS to have their business valued.
WHEN HAVE VALUATIONS TAKEN PLACE?
49% 46%
LEARN MORE
WITHIN THE PAST TWO YEARS IN THE LAST TWO TO TEN YEARS
32%
of owners paid between
$5,001 AND $20,000
8%
of owners have paid
OVER $20,000
Need help getting started? Contact your financial representative.
The survey was conducted by Harris Poll and included over 500 online interviews conducted in January 2015. Interviews were conducted using our Harris Poll Small Business Panel. Results were weighted for company size based on the number of employees, entity type and annual sales. Potential respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. Because the sample is based on those who agreed to be invited to participate, no estimates of theoretical sampling error can be calculated.
