Only four in 10 business owners realize it is very important to know what their business is worth right now.
More than three-quarters (77
percent) of business owners say they started their companies to provide
financially for their families, yet despite these good intentions, less than
half feel confident with their current personal financial situation. More than
a quarter (28 percent) say that it is all they can do to keep up with everyday
business expenses, let alone think too much about their future.
This disparity is among the
key findings of Massachusetts Mutual Life Insurance Company's (MassMutual) new
study, "Business Owner Perspectives: 2011 Insights in an Uncertain
Economy," a survey of more than 1,600 business owners in the United
States. The study looks at business owners' thoughts about both their personal
and business finances and includes multicultural and women business owners, two
fast-growing groups in the U.S.
are vital to our economic recovery, so it is concerning that so many business
owners seem to be sacrificing their own and their family's financial future,"
says Tara Reynolds, corporate vice president of consumer and product marketing
at MassMutual. "With help, business owners can look past the seemingly
overwhelming day-to-day demands of running their businesses and establish and
meet their long-term financial goals."
Only four in 10 business
owners realize it is very important to know what their business is worth right
now, and 43 percent of business owners have not had their businesses valued in
the past three years. "Knowing and carefully tracking the value of their
business is the key to keeping business owners in control of their own
futures," says Reynolds. "Those aware of their company's value can take steps
to protect it from unexpected events-such as the death or illness of a partner-using
it as the foundation for sound business, succession and estate plans. Working
with a professional who is qualified to value businesses is a key first step to
any long-term planning."
The top business concern of
owners who participated in the study was keeping key employees loyal, with 53
percent expressing this concern. However, 30 percent said they have special
benefits in place to help ensure employees who are integral to the business'
survival remain loyal and with the company.
In addition to special
incentive benefits, the study suggested business owners can take steps to
protect their businesses against the loss of an essential employee-perhaps
their most valuable asset-and the lost sales, productivity or even some good
customers that may result. The first step may be estimating the financial
impact on the business, if a key employee is unable to work or leaves the company.
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.