2025 promises to be a consequential year for business owners who face decisions about growth, family and legacy

Business owners are forging ahead with big plans in 2025, according to The Northern Trust Institute’s third Business Owner Benchmark. The report, based on a survey of Northern Trust’s business owner clients, reveals that despite mixed feelings about the economy, many respondents are poised to undertake large scale changes within their business next year.

According to Eric Czepyha, Northern Trust’s Director of Business Services, the economy, market conditions and industry trends will always be important factors, but based on years of working with thousands of business owners, the future of these businesses is often largely determined by family dynamics and the overlapping roles of owners, their families and management.

“With this survey, we delve into the ambitions of startup founders to multigenerational family business owners amid a rapidly shifting landscape,” Czepyha said. “We discovered that many respondents are thinking big – for instance, evaluating new areas to grow their business or considering ways to monetize their business, all the while attempting to navigate how to best prepare their children for the wealth they will eventually inherit.”

Cautious about the state of the economy

The survey was conducted in third quarter of 2024 when the Federal Reserve initiated its rate cutting cycle and expectations increased for a “soft landing.” Yet only 8% of respondents said they are optimistic about next year’s economic outlook. The leading cause of respondents’ malaise was the current political environment (54%), followed by potential changes to tax policy (42%) and the impact of ongoing global conflicts (34%).

Committed to undertaking major changes

While it remains to be seen whether the new administration will help assuage these concerns, business owners will be proactive next year, depending on where they are in their lives. Respondents younger than 65 exhibited a growth mindset with plans to expand into a new line of business (30%) or acquire a new business (28%) next year. On the other hand, respondents older than 65 were more interested in selling all or part of their business (33%).

Cultivating the next generation

Although business owners are committed to instilling the next generation with values such as integrity and gratitude, 64% of respondents lack confidence in their children’s ability to manage the wealth and businesses they will one day inherit. Further, 25% of respondents have either not thought about the greater purpose (or “why”) behind their wealth or have thought about it but have yet to share this purpose with their children.

Considering alternative ownership structures

Business owners are often driven to succeed for reasons well beyond making money, including keeping their business in the family or eventually transferring ownership to their employees. For 43% of respondents, it is also important for their business to still exist 100 years from now. However, 64% of respondents are not familiar with the emerging trend of transferring ownership of your business to a perpetual purpose trust, which can be a powerful strategy for preserving the legacy of a business over the long-term.

About the Business Owner Benchmark

An online survey was fielded in September 2024 and responses were received from 123 business owners with a median age of 67. The respondents represent small, midsize and large companies from all industries. The resulting report provides a window into their diverse perspectives around how they deploy their wealth and what drives them as they prepare for the future.

Download the full report for additional insights and advice.

Northern Trust Wealth Management offers holistic wealth management services for affluent individuals and families, family offices, foundations and endowments, and privately held businesses. It is recognized for its innovative technology, service excellence and depth of expertise, with over $440 billion in assets under management as of September 30, 2024. The Northern Trust Company is an Equal Housing Lender. Member FDIC.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2024, Northern Trust had assets under custody/administration of US$17.4 trillion, and assets under management of US$1.6 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on northerntrust.com. Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/terms-and-conditions.

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