Despite significant income and personal assets, the majority of small-business owners have not enlisted the help of a professional for financial and estate planning, according to a new online study of nearly 1,600 business owners with 100 or fewer employees.
Less than 40% have a formal financial plan, concludes the survey by Brightwork Partners, a financial-services consultancy in Greenwich, Conn., and Greenfield Online, a Wilton (Conn.)-based company that conducts online market research.
The New Economy business owners, says Merl W. Baker, principal of Brightwork Partners, have an average household income of about $165,000 a year and are in their early 40s. Most have founded their own companies and nearly half are women. Baker speculates that early success has made them more skeptical about turning to others for advice, as well about buying traditional financial products such as life insurance.
Who's most likely to have a financial plan? Surprisingly, age isn't a factor, but the size of the entrepreneur's company is. Owners of companies with 50 to 99 employees were most likely to have a formal plan. The survey showed that more than two-thirds of that group of business owners have a written plan. They also have higher incomes -- an average of $240,000 a year.
By Robin D. Schatz in New York