Many of the wealthy investors are wiling to consider starting a new venture now or in the very near future as they are of the opinion that the business environment is ripe to do so. This was claimed in the recent report by UBS Wealth Management USA’s Investor Watch report, “Who’s the boss?”
On the other hand, there are others who view that the environment is good to stage an exit from investments even though nearly half of them do not have a ready exit plan at hand and there are issues with choosing an heir to their business. The report stated that while about seventy-seven percent of Millennials are of the opinion that right now it would be too risky to begin a business, there were four-out-of-five business owners who that instead of owning and running a business, the children would rather part with the money from the sale of the business.
The UBS report examines the sentiments of investors about owning businesses at the present time. About 2,000 wealthy people – which included 1.085 business owners all with high net worth, were polled in the survey.
The report hinted that the trend of entrepreneurship is here to stay. The tax reforms in the U.S. has made owning a business more attractive according to 73% of respondents. And about half of the respondents were of the view that establishing oneself as an entrepreneur it amongst the most prestigious career paths that can be taken now.
The thought of exiting from their business is also being driven by the prevalent business and economic environment. Respondents prepared to leave their business within the next five years amounted to forty-one percent of the respondents. The driving force behind 52 per cent of respondents wanting to exit a business or sell it include the potential of obtaining a favorable price from a sale in addition to them nearing the retirement age.
“Small businesses are experiencing an important shift,” said Paula Polito, Client Strategy Officer of UBS Global Wealth Management. “Most owners are choosing to sell instead of passing businesses to the next generation to fill their shoes.”
Despite many of the respondents are prepared to sell their business, the survey found that only a handful were really prepared for such an exit.
“Selling a business successfully requires a great deal of planning, which owners often underestimate,” said Stewart Kesmodel, Head of Global Family Office, Americas for UBS Global Wealth Management. “Before pursuing a sale, it is important for business owners to not only have a view on the value of their business to potential buyers, but also an understanding of how that price applies to their personal needs post-transaction.”
A staggering 89% of the respondents said that there was a distinct lack of enthusiasm among the potential heirs to a business and this was the primary reason that they have decided to sell their business even though they had considered handing over the business to family heirs.
And lastly, about 72% of Millennials were interested in starting their own business among the respondents who were considering setting up their own business. The report however found a lack of marked deficiency in laying the groundwork and hesitation to make their dreams of setting up their own business.
(Adapted from Businesswire.com)