Most Hispanic Business Owners Will Pass Business on to a Family Member, New MassMutual Study Reveals

Lawndale News Chicago's Bilingual Newspaper - Business

To Hispanic owned-businesses, family and community are key, according to a new study by Massachusetts Mutual Life Insurance Company (MassMutual). Research from the 2015 Hispanic Business Owner Perspectives Study revealed that 80 percent of respondents will pass the business on to a family member – most often a child. However, only 37 percent of those individuals said their chosen successor may not even know about this succession plan.

For Hispanic business owners, the aspiration to live the American Dream is no different, but Hispanic business owners’ definition of success may be broader, encompassing their ability to care for and support extended families, friends, and their communities. The study reported they feel a strong sense of responsibility to their families and communities but tend to lack financial confidence and knowledge. Hispanic-owned businesses are growing at double the national rate, according to the U.S. Census. And more so than the general average, Hispanic entrepreneurs are generally younger and more likely to take community into account when making business decisions. Additionally, the majority of those surveyed started their businesses to pursue the American Dream, take control of their lives, and support their families. Yet many do not have the necessary resources in place to gain that control and secure a healthy financial future for their families. When it comes to taking action to address core business planning issues, Hispanic business owners face many challenges in achieving their version of the American Dream.

Disability Income Insurance
• Only half of the Hispanic business owners have a buy-sell agreement in place for death and even fewer have a buy-sell agreement in place for disability.
• Protecting the business (35 percent) and family (37 percent) are the primary motivators for having these plans in place.

Succession Planning
• Only about half of the Hispanic business owners surveyed have any type of succession plan in place.
• Eighty percent said they will pass the business on to a family member – most often a child. However, only 37 percent of those individuals said their chosen successor may not even know he/she is the successor (significantly higher than 23 percent of the general population).

To learn more about planning for your business or to locate a financial professional near you, visit massmutual.com/latino.

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