Many Wealthy Business Owners Don’t Have Succession Plan

The majority of wealthy business owners have no succession plan in place, but many want to keep working.

A survey commissioned by PNC Financial Services Group, Inc. finds that only one-third of business owners have a written succession plan in place to transition their business to family or other associates. “Business owners who have put a lifetime into their work often have a mindset that ‘no one can run this business better than I can,'” said Jonathan Lander, J.D., L.L.M., a senior wealth planner and vice president of PNC Wealth Management, in a news release about the survey.

While that may be true, 43% of affluent business owners, almost double that of affluent Americans who do not own a business, said they want to work until age 70 or later and 54% of those said their main reason was “I enjoy working and don’t want to stop.” This was followed by 20% who said, “My work is a big part of who I am;” 10% who said they want to work “to maintain my current standard of living in my retirement;” and 8% who indicated, “I fear I will be bored in retirement.”

Sixty-one percent of affluent business owners strongly or somewhat agreed with the statement, “I will continue to work, no matter how much money I have,” while only 27% of non-business owners said the same.

The Wealth and Values Survey was conducted online within the United States by Harris Interactive in September and October 2007 among a nationwide cross section of 1,509 adults (age 18 or older), including 587 business owners with annual incomes of $150,000 or above (if employed), at least $500,000 of investable assets (if employed), or at least $1 million of investable assets (if retired).

A report of survey highlights can be accessed here.