New research shows that Latino business owners are making significant strides compared to a national average
As an example, findings indicate that Latino business owners are notably more likely than in the past, and more likely than the national sample, to have a succession plan in place. Sixty nine percent of Latino owners have a written succession plan and 59 percent have a buy-sell agreement in case of death (and 52 percent in case of disability). Also, Latino owners are significantly (48 percent) more likely than the national sample to report funding their buy-sell agreements with cash flow from their business.
"Our research found that Latino entrepreneurs are generally taking significant steps in their business and financial planning and are more likely to be motivated by family and community," said
Key Business Issues
The
Interestingly, however, Latino business owners today are much more likely to be thinking about key business issues than they were in 2015 – and much more frequently than the national sample.
More good news: Nearly all survey respondents reported having gone through the financial planning process and the majority of respondents do it every year. Additionally, Latino business owners are also more likely to have had their business valued (73 percent) in the past three years than the national sample (63 percent). In terms of employee benefits, they are also more likely to offer financial planning benefits to their top employees.
Latina owners in particular are more likely than other women owners to have buy sell agreements in the event of death and disability, valuation, and a business succession plan.
Retirement
When it comes to their future and retirement, Latino business owners are more likely than the national sample to say they will retire but haven't given it much thought (31 percent vs. 25 percent of the national sample). Only 24 percent say they plan to retire in the next five years, likely driven by the younger average age of Latino business owners.
Latino business owners are also less likely planning to fund retirement through personal savings, a retirement account or
Latina business owners are less likely to have gone into business for a lifestyle of independence, and prioritize financial planning for personal over business. They are also more likely to offer benefits to key employees than other women owners.
Exit Strategy
Overall, Latino business owners' exit strategy and plans to pass on the business are similar to the national sample. When it comes to their ideal exit strategy, 34 percent of Latinos plan to leave business to family member (vs. 30 percent of the national sample), 21 percent would like to sell business to key employee (vs. 21percent of national sample), and 14 percent would like the business sold to an outside buyer (vs. 17 percent of the national sample).
To learn more about planning for your business or to locate a financial professional near you, visit massmutual.com/businessownerperspective.
Methodology
The 2018 MassMutual Business Owners research was conducted by
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Maria Fernanda Trochimezuk
Phone: (310) 696-9585
Email: [email protected]
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SOURCE
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