This year, Brown Brothers Harriman (BBH) conducted an inaugural Private Business Owner Survey. The respondents represented 400 U.S. private businesses with enterprise values from $10 million to $500 million and more. Of the owners surveyed, 87% represented family-owned enterprises; 74% were male, and 26% were female. We asked about how the business affects their family, how they think about the future, what might happen when they step away from the business, and how business strategy might be changing due to economic conditions.

The results were fascinating.

• Business owners report that they have estate plans (98%) but haven’t communicated them (94%). 
• They have endured family disagreements about the business (84%), yet it is very important for most (85%) to keep the business in the family.
• While all have taken some steps to prepare the next generation to lead the business, most have not yet defined the roles of next generation leaders or not communicated their plans fully (75%).

Here, we examine the attitudes of private business owners toward economic uncertainty and investing in more detail.

While economic uncertainty influences decision-making for most business owners (82%), the majority (69%) are increasing their efforts to grow the business through investment in light of uncertainty; only a few (14%) are decreasing efforts to grow in favor of maintaining liquidity. Business owners with experience under their belts, those over age 40, are even more likely to increase their push for growth during volatile times, with 74% reporting increased efforts to grow.

A turbulent economy can also cause business owners to consider selling the business. Seventy-six percent agree that they “lean more toward selling the business” when navigating through economic uncertainty. That number increases to 80% for those working in the company in a senior leadership role, rather than in a governance or more passive role. Only 50% of board members or owners holding other advisory roles say the economic uncertainty causes them to think more about selling. Naturally, senior leaders take the brunt of the economic stress – perhaps making decisions about layoffs or cutting costs – that cause them to lean toward an exit in tough times.

Interestingly, these numbers look different when using a gender lens. Women business owners see their companies as more stable investment vehicles, with 41% classifying the business as more like fixed income (vs. 29% of men). It is hard to know why more women owners see their companies as bond-like performers; one possibility is that they make more conservative business decisions and reduce the risks inherent in the business to a greater degree.

If you are interested in the full survey results, please visit bbh.com/2023businessownersurvey. In addition, we are happy to discuss the survey outcomes and what they might mean for you, your business, and your family, so please feel free to reach out to your BBH relationship manager.