Parents who are small business owners are more optimistic about their children’s future than parents overall, according to a new survey from New York Life. More than 75 percent of small business owners with children under the age of 18 believe that their children will have a better standard of living than they do, versus only 67 percent of the general population said the same in a survey of parents conducted in December 2017. Small business owner parents are also more optimistic about the future of all children in the United States.
Small Business Owners Parents | All United States Parents | |
When my own child(ren) become adults, they will have a better standard of living than I currently do. | 77% | 67% |
In general, when children in the United States today become adults, they will have a better standard of living than their parents currently do. | 65% | 54% |
“What this tells me is that being in the driver’s seat, as many small business owners are, is empowering and puts them in a brighter place when thinking about what lies ahead for the future for children and especially, for their own children,” said Brian Madgett, vice president, New York Life.
For the survey, a sample of 1,059 small business owners were interviewed, including a subset of 586 small business owner parents who have children under the age of 18 living in their home. The survey was conducted in January 2018 by Ipsos and sponsored by New York Life.
Business = Small Business Owner’s Personal Pension
“Small business owners are counting on their business to provide for them in retirement. For many entrepreneurs, their business will serve as their own personal pension and what they rely on to provide retirement income, with 42 percent reporting that their business is their retirement plan. Small business owners know how important it is to protect their retirement as well; 66 percent say they need to do more to ensure they have adequate income from their business in retirement and 54 percent have a backup plan if they are unable to sell their business or if the proceeds are not sufficient for retirement,” added Madgett.
Taking steps to ensure their finances are in order will be important especially to the 51 percent who report that they plan to retire at the age of 65.
2018 Focus is on the Future; Short Term Growth Plans Have Slowed Since 2017
Financial expectations for small businesses in 2018 remain high with 61 percent of small business owners optimistic. This mirrors the sentiment recorded in last year’s New York Life survey of small business owners, where 60 percent reported expecting business to improve heading into 2017.
More than 70 percent of small business owners state that technology will have a positive impact on their business in 2018. Forty-six percent feel that tax policy is a positive for their business. Here is how other aspects ranked in terms of a positive impact on their business in 2018:
Will have a positive impact on the business | Small Business Owners (n=1,059) |
Technology | 71% |
Digital/Social marketing | 64% |
Local economy | 60% |
Local competition | 49% |
Tax policy | 46% |
The employment market/talent pool | 46% |
The new political landscape | 44% |
Interest rates | 41% |
Global competition | 39% |
Health insurance | 38% |
Interestingly, there are some differences since last year in terms of what small business owners will focus on when it comes to planning. With an eye toward the future, a large percentage, 62 percent, of small business owners plan to address business continuation planning in 2018 and a similar amount, 66 percent, of small business owner parents plan to involve their children in their business this year. But, short term growth plans have slowed somewhat since last year with fewer planning to seek additional capital (45% vs. 55%), hire more employees (42% vs. 52%), and grow their companies (57% vs. 62%).
Plans in the coming year.. | Small Business Owners Survey 2018 | Small Business Owners Survey 2017 |
Plan to network more in-person/online with other business owners and/or professionals | 65% in-person | 64% |
Plan to incorporate mobile technology in my business | 61% | 66% |
Plan to grow my company- e.g., open another location, increase revenues, expand capabilities, etc. | 57% | 62% |
Plan to seek additional capital | 45% | 55% |
Plan to hire more employees | 42% | 52% |
Plan to improve my employee benefits package | 37% | 49% |
Plan to take out a loan | 32% | 46% |
Yoda Don’t Try. Do
When small business owners are asked what Star Wars character they most identify with when it comes to financial planning, rises to the top, Yoda does.
“A famous quote that resonates with me when working with small business owners every day is something that Yoda says all the time: “Do or do not, there is no try.” Most successful small business owners I talk to believe that failure is not an option. They are not starting a business to try to be successful, instead, they will do everything needed to be successful,” said Madgett. “Also, I am not surprised to see Princess Leia and Hans Solo next up the adventurous and risk-taking aspects of those personas are also very much a part of the small business owners I meet.”
Small Business Owners (n=1,059) | |
Yoda patient, will use past experience to guide future decisions (serving them very well), while passing on wisdom and knowledge to future generations is also an important piece of overall goal | 23% |
Princess Leia somewhat adventurous, challenging norms but remaining focused, will seek balance between enjoying achieved successes and continuing to work hard for continued growth/success toward financial goals | 16% |
Han Solo – independent and willing to take risks, has/will experience some financial setbacks but perseveres towards a positive financial goal for self and/or family | 16% |
Obi-Wan Kenobi wise and experienced, will apply past knowledge to side step trouble and find success and is actively willing to take on big obstacles (working solo or with others) for the greater good | 16% |
Luke Skywalker family oriented, will build financial goals around needs of family, relying on the expertise of others (though at times reluctantly) to find the way to navigate through the ups and downs | 13% |
Chewbacca loyal and committed, will consult partner when making financial decisions and is ready to take on any task for the good of their family | 12% |
CP30 – fretful, will often wind up in a financial bind, sometimes needing help from others but other times surprising even themselves in working out a solution | 5% |
ABOUT THE SURVEY
These are the findings from an Ipsos poll conducted January 2 – 11, 2018 on behalf of the New York Life. For the survey, a sample of 1,059 small business owners (ages 18 and over) from the continental U.S., Alaska and Hawaii was interviewed online, in English. To qualify for the survey, respondents had to be owners of business that employed no more than 500 employees. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll has a credibility interval of 3.4 percentage points for all respondents surveyed.
