70% of owners have an estate plan or written wealth transfer strategy in place; 15% say that the plan is in the process of being created
Private businesses in the U.S. vary greatly in terms of size, sector, service, and product. So how do business owners plan for the future of their businesses and families based on common challenges?
- Governance and succession
- Long-term strategic objectives
- Capital needs
- Complicated family dynamics
We set out to unearth how business owners, think, feel, and respond to both the challenges and opportunities that shape how they run their enterprises.
Preparing the next generation for family wealth
Some owners fear that talking too soon may spark entitlement or anxiety instead of instilling gratitude and responsibility. When an estate plan breaks down, it’s usually because of poor communication, not flawed tax strategy. Starting early with age-appropriate, bite-sized conversations makes it far easier to share the full plan naturally over time.
Business owners' estate plans include a variety of provisions: 76% assets will be held in trust for descendants; 38% outright bequests to descendants; 23% significant philanthropic bequests; 19% assets gifted to foundations or donor-advised funds; 12% none of the above
Some owners fear that talking about wealth too soon may spark entitlement or anxiety instead of instilling gratitude and responsibility. Starting early and tailoring these conversations to the age and maturity level of each family member can make the eventual transition smoother and more natural. This ongoing dialogue helps instill values, trust, and confidence over time.”
38% of owners say they have been completely open and transparent about their wealth and estate plans with the next generation; 36% have only been somewhat open and transparent; 21% have not shared details of their plans with the next generation
How prepared do business owners feel the next generation is to manage their wealth (if that is part of their estate plan)?
How prepared do business owners feel the next generation is to manage their wealth (if that is part of their estate plan)? 49% somewhat prepared; 18% somewhat unprepared; 14% completely prepared; 14% completely unprepared; 6% other
To learn more about how we work with family businesses to navigate the complexities surrounding next generation engagement, contact our Center for Family Business or Next Generation Experience teams.
Succession planning for family businesses
How are private business owners thinking about the long-term ownership strategy of their business?
How are private business owners thinking about the long-term ownership strategy of their business? 62% transition ownership to the next generation; 14% sale to strategic buyer; 12% opportunistic/noncommittal; 8% management (MBO) or employees (ESOP) acquire ownership of the business; 2% sale to financial buyer; 2% other; 0.2% IPO
Succession planning remains one of the biggest vulnerabilities for private businesses, and a large part of that often stems from worries around successor readiness. Owners may know who of the next generation they’d like to take over, but how can they know when the next generation is ready? Like estate plans, sharing an ownership transition plan can happen through several age-appropriate conversations about the business – its values, legacy, and mission – over time.”
23% have a formal succession plan for key executives that is fully documented and implemented; 30% have no formal plan currently; 46% have a plan in progress
What do private business owners see as the biggest challenges to succession planning?
Succession planning is more than just continuity in governance – it lays the groundwork for business resilience. Many anticipate ownership or leadership transitions within the next five years but cite the toughest challenges as personal, from sustaining family values and avoiding conflict to ensuring strong leadership and innovation.
What do private business owners see as the biggest challenges to succession planning? 46% family dynamics; 41% lack of clear successor; 28% emotional reluctance to exit; 13% tax implications
To learn more about how we work with family businesses to navigate the complexities surrounding succession, contact our Center for Family Business.
Growing and sustaining the business
Private business owners feel there is mixed alignment on ownership strategy among their present ownership groups.
Private business owners feel there is mixed alignment on ownership strategy among their present ownership groups. 59% very well aligned; 32% somewhat aligned; 4% somewhat aligned; 4% not well aligned; 1% other
For many private and family-owned enterprises, growth isn’t just a priority – it’s the organizing principle. But not every owner will have an identical view on how to approach this – or even share the same views on long-term strategy. There’s value in creating a framework that allows shareholders to discuss the relative priority of choices around what they want from their ownership. Finding ways to solve for variations in owner interests can in turn make the business a powerful, long-lasting enterprise.”
When seeking outside capital, which sources are private business owners considering?
When seeking outside capital, which sources are private business owners considering? 69% bank loan; 30% investment from a family office; 20% private equity; 16% sale of a portion of the business; 12% none of these; 10% ESOP; 2% IPO
And when it comes to capital …
When it comes to capital: 31% cite control concerns as the single biggest barrier to accessing growth capital; 24% see market conditions as the biggest barrier
To learn more about how we work private business owners to help them achieve their business and personal goals, contact our Corporate Advisory & Banking team.
Designing dividend strategies
64% of owners pay annual dividends to shareholders; 40% distribute a variable amount above tax liabilities; 23% decide the amount each year on a discretionary basis; 19% calculate the amount using a formula; 15% distribute a fixed amount above tax liabilities
There are numerous ways to set dividend policies – not a one-size-fits-all formula. Ultimately, a thoughtful dividend strategy not only rewards shareholders, but also safeguards the company’s ability to reinvest and grow sustainably.”
83% of owners believe their approach to dividends is sustainable
… although some owners say this sustainability is conditional on several factors, including:
- Alignment on ownership strategy
- Profits and expenses
- Business growth and performance
These answers underscore the fact that there is no one “right” way to approach dividends. Just like with ownership strategy, private business owners have varying priorities when it comes to establishing dividend policies.
To learn more about how we work private business owners to design dividend policies, contact our Corporate Advisory & Banking or Center for Family Business teams.
Who we surveyed
The BBH Private Business Owner Survey was conducted among 491 respondents from family-owned and privately owned companies. Below is a breakout by company revenues.
Company revenue breakdown among respondents:
Company revenue breakdown among respondents: 35% under $25 million; 26% $26 million to $100 million; 25% $101 million to $500 million; 14% more than $500 million
Methodology
This survey was conducted by MLR Media LLC, via an email invitation and online survey in July and August 2025, and drew 491 usable responses. Respondents were drawn from the family-owned and privately owned company subscriber lists of MLR Media, Inc., the producers of Family Business Magazine and Private Company Director Magazine. Multiple responses for the same company were deduplicated. The sampling variation for this survey indicates a confidence level that the chances are 95 in 100 that the survey result does not vary by more than 4.4% from what we report.
Contact Us
Brown Brothers Harriman & Co. (“BBH”) may be used to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2025. All rights reserved. PB-08967-2025-10-08
