The 2021 Business Owner Benchmark: Fortifying for the Future

In the resulting report, we explore five themes and provide insight for addressing common challenges — all based on empirical observations and data from working with thousands of business owners across the country.

Theme 1: Planning for Changing Tax Policies

Not surprisingly, given the current landscape of significant, proposed policy changes and record-high government debt, taxes are top of mind for business owners. In fact, concerns about higher taxes are significant enough to cause nearly half of respondents to evaluate relocating their primary residence and/or business to a different state.

While much uncertainty exists around the ultimate form of tax policy changes, there are a number of personal and business planning strategies to consider in light of the proposed changes.

Learn More: Navigate Tax Uncertainty

Theme 2: Addressing Transition Uncertainty

With an eye to the future, most business owners recognize the value of having a succession plan in place, and 70% of our survey respondents indicated that they already have some form of succession plan in place. However, half of the business owners who have a plan are nonetheless worried about the ability of their chosen successor(s) to maintain and grow the business over the long term.

Business succession planning is a complex and interconnected process with unique considerations specific to each business. There are, however, several best practices business owners can adopt to increase the odds of a successful transition.

Learn More: Plan an Effective Transition

Theme 3: Building Your Board

A majority of business owners we surveyed indicated they have a board of directors in place and reap multiple benefits from their board. However, while a minority, the percentage of business owners without a board of directors or advisory board is sizeable at 32%, highlighting the significant opportunity that exists within this cohort to establish boards to potentially realize some of the same benefits that the other two-thirds of respondents enjoy.

Building an effective board of directors with the right people, skills and engagement can significantly improve your company’s performance over the long term.

Learn More: Build an Effective Board

Theme 4: Engaging the Rising Generation

A common concern we hear from business owners is that the next generation is either not interested in leading or prepared to lead the business. By building a systematic process, however, it is possible to both inspire the rising generation to get involved in the business and prepare them to contribute to its success.

One way to engage the rising generation is to create ongoing opportunities to learn about the family business. Touring facilities, shadowing executives, mentorship programs, summer jobs and internship opportunities are all learning experiences that can help determine which members of the next generation are most interested in the business and may choose to one day join the company.

This also can help create a pipeline of future leaders — even for those family members who ultimately decide not to enter the business — and facilitate a greater appreciation of the benefits and responsibilities that come with being a business-owning family.

Balancing business objectives with family harmony can be rife with complexity, but there are several strategies that have proven helpful.

Learn More: Engage Your Family

Theme 5: Building and Retaining Your Workforce

Most business owners demonstrate a strong commitment to supporting and developing both family and non-family employees who work in the business.

Yet, only half of businesses who employ family members have formal policies in place that clarify family employment expectations and create objective criteria for how family members are hired, promoted and compensated. Adopting formal family employment policies helps to mitigate some of the intense emotions surrounding situations where family members might have unrealistic assessments of their progeny’s competence. It also ensures that all employees will be treated fairly and have the opportunity for career progression.

Learn More: Enhance Employee Morale