business owners name three top challenges.
by 卡塔尔世界杯常规比赛时间 research
small, private businesses are the bedrock of the american economy.
- there are more than 33 million of them in the country.
- they constitute 99.9 percent of american businesses.
- they employ over 60 million people.
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- they account for over 62 percent of net jobs created since 1995.
- they generate a third of export value.
- they are a bountiful source of innovation.
they also make up the majority of the clientele of cpa firms, most of which are themselves small, private businesses. but a small, private business isn’t just another client. each is a bundle of opportunity. they all need more than tax preparation. they need advice. they need planning. they need governance. they need experience. sometimes they even need a little family therapy.
the second annual private business owner survey issued by brown brothers harriman offers insights that cpa firms can use to better understand small business clients and their needs.
the survey tapped 400 private businesses, a quarter of them valued at $10-50 million, a quarter over $500 million, and half distributed in between. all had private owners, none owned by an institution or fund.
many serious challenges
the survey report noted the many serious challenges faced by private businesses around the world. among them:
- in many places, geopolitical unrest
- market volatility
- changes to the regulatory environment
- the uncertainty and importance of the u.s. presidential election
- the evolution of how business is conducted – and by whom or what
it’s a lot to think about along with the usual concerns of marketing, personnel, quality control, supply chains, finances and so on.
asked about their top three challenges, the majority of respondents named three big ones:
- economic instability and inflation
- the rise of artificial intelligence
- the political environment in the u.s.
if those are the biggest challenges to private businesses, and if most accounting firm clients are private businesses, then those challenges are a firm’s opportunities.
family complications
family businesses face a whole additional layer of challenges, one of them being, of course, the complications inherent to every family.
a family business isn’t just a business. it’s a part of the family itself. the family identifies with the business. and that’s the top reason that 45 percent of respondents would not consider selling some or all of the business in the next 12 to 24 months.
and a staggering 91 percent of private business owners say that it is important that their business remain in the family for the next generation. so no surprise that 99 percent say they have taken steps to prepare for the next generation to take over.
nonetheless, 29 percent are still struggling to pick a successor, and 74 percent say that roles for the next generation are either not well defined or not fully communicated.
willing to sacrifice growth
some family leaders are willing to make sacrifices to ensure that their inheritors continue to receive dividends even if they don’t want to participate in the business. a good 46 percent are willing to give up part of their ownership to maintain dividends, and that’s up 13 percentage points since last year. more than a third are willing to sacrifice potential growth for a guarantee of continued dividends for the family.
so there’s some work to be done. and a cpa practice with experience or knowledge of the process – and the psychology – of transferring a business or its dividends from oldsters to whippersnappers is in a good position to offer insight and expertise. there are potentials in
- estate planning,
- gift and estate tax exemptions,
- communication of estate plans to family members,
- the succession process,
- the establishment of the values that are to be passed on,
- security for those inheriting substantial wealth in various forms, and
- yes, even emotional support.
that all adds up to a lot of niches for a lot of clients – in other words, a lot of opportunity.