Business Owners’ Pandemic Exhaustion Is Leading to Early Retirement
Many business owners are experiencing pandemic burnout and exhaustion, resulting in a high percentage moving to retire earlier or looking to sell their companies, according to a new Wilmington Trust survey.
The number of business owners who anticipate retiring sooner than expected has doubled since last August. The survey’s data indicates that among owners of larger businesses, there was a 110% increase since August 2020, and the number of owners of smaller businesses who plan to retire sooner has jumped 100%. In that same time frame, the number of owners of larger businesses who say the pandemic has spurred them to sell their business sooner than expected has increased 31%.
The survey also notes that the number of owners optimistic about the future of the U.S. economy has plummeted from the March 2020 level.
“Exhaustion may be playing a significant role in the growing interest in transition,” Stuart A. Smith III, national director, Business Value Strategies at Wilmington Trust, says in the survey. “After making it through the pandemic, enough may be enough for some owners. Dealing with two major economic events in less than 15 years may have them wondering if it’s time to take money off the table, especially as they near retirement.”
Owners’ confidence in passing along their business to a successor is also eroding, the survey finds. In March 2020, half were very confident that their personal and business assets would be well managed if they were to die or become unable to manage them, compared to only 34% this quarter.
In addition, half of owners expect lower or flat revenue in 2021 versus pre-pandemic figures, while their confidence in achieving their business’ long-term financial goals dropped from 57% to 34%.
The survey also notes that one-third of business owners had to increase investments in technology to meet new customer needs. Their top priorities include e-commerce (39%), overall tech equipment/infrastructure (38%), social media (33%) and digital advertising (28%).
However, while digital transformation has great potential for helping businesses thrive, it is also adding additional layers of cost and anxiety onto some owners who either can’t afford to or choose not to upgrade, the survey finds. Rather than lead their companies into the digital age, the survey shows that an increasing number of older owners (age 45-plus) are planning to retire sooner than expected.
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