A love of work is behind
many Hispanic business
owners being without a
The top three reasons Hispanic business
owners cited for not having a business
succession plan in place are because they
do not know when the right time is to create
one (31 percent), they do not want to give
up their life’s work (31 percent) and they do
not think it is necessary (22 percent).
Unplanned life events or crises, such as
a health issue or unexpected death, can
undermine the success of a business if a
succession plan is not in place. Having a
plan in writing creates certainty around
the company’s value, terms, and financing,
identifies triggering events for succession,
establishes retirement income for the
business owner, provides security for
surviving family members and protects
remaining business owners, which ultimately
shelters the employees as well.
“It is honorable to love your work and
business so much that you don’t see
yourself doing anything else,” Walker added.
“What’s important for owners to realize,
though, is that if a formal plan is not in place,
every state has different laws to determine
the disbursement of the business assets if
a business owner dies. Most owners I know
want to have a say in this process, and that’s
why creating a succession plan well before
retirement should be a critical and strategic
The survey noted that 60 percent of
business owners were unsure or not aware
that the state could determine the business’
future without a plan in place.
There is likely a correlation for Hispanic
business owners between deferring
retirement and postponing the development
of a business succession plan.
Nationwide’s 2017 business owner survey
found that 72 percent of business owners
are not planning to retire, don’t know when
they’ll retire or don’t plan on retiring for
another 11 years or more. A primary reason
Hispanic business owners are delaying
retirement is that they love their business
too much to retire (60 percent), followed
by wanting to leave a legacy (29 percent)
and lacking trust in others to take over their
business (27 percent).
The same study revealed that about
half (48 percent) of Hispanic
business owners do not have a
business succession plan in place.
“It has been our experience that business
owners regularly prioritize the immediate
needs of the business,” noted Kirt Walker,
Nationwide Financial president and COO. “If
they’re not planning to retire soon, today’s
daily operations and goals take precedence
over developing a succession plan for
the future. However, since unplanned and
unexpected events could severely impact
leadership, there is great urgency in making
sure a solid plan is in place now – to protect
the owner and his or her family, employees
Nationwide simplifies the planning process
for business owners wanting to protect their
life’s work into five, manageable steps.
1. Set goals and objectives to
help define exit timing, key
stakeholders, a strategy team
and financial needs.
2. Contact your advisor to
determine the fair market value
of the company through resources
like Nationwide’s Business
3. Consider viable options of
whether to bequest, gift or sell the
business and ask what the options
look like in disability, retirement
or death scenarios.
4. Choose a plan and execute the
documents in partnership with an
advisor, attorney and accountant.
5. Fund the plan to provide key
employee stabilization, income
replacement, and/or estate
equalization or liquidity.
Business owners wanting to learn more
about business succession planning should
meet with their advisor.
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