Private business owners are concerned about the current political environment, economic conditions, federal regulations, and the use of AI in the lead-up to the U.S. presidential election in November. According to new research from Brown Brothers Harriman (BBH), private business owners identified economic instability and inflation (47%), the rise of AI (45%), and the political environment in the U.S. (45%) as three of the biggest challenges they face today.
For its second annual Private Business Owners Survey, BBH gathered insights from 400 private business owners from U.S. enterprises valued at over $10 million. It explores their overall state of mind amid macroeconomic trends, wealth and succession planning, and how such challenges shape the future of how they run their enterprises.
Here are some key takeaways of the survey:
Private Business Owners Eye Impact Of AI, Plan For Regulatory/Tax Changes
Surveyed private business owners are contemplating the use and implications of AI for businesses and how to plan for potential forthcoming tax policy changes.
“Economic cycles come and go, interest rates rise and fall, and presidential elections happen every four years. Artificial intelligence, on the other hand, is a paradigm shift, and the pace of progress in this area poses opportunities, challenges, and risks to businesses of all sizes,” said Scott Clemons, Partner and Chief Investment Strategist at BBH.
Despite citing the rise of AI as a challenge, 99% are currently using AI for business purposes, including marketing and content creation, data and predictive analytics, and automating processes. The future of the rapidly growing AI industry will largely depend on how the federal government decides to regulate the technology, which private business owners are divided on – 46% state that AI must be more regulated.
Private business owners are also split on broader regulatory issues. Regarding international trade policy, 48% feel it should remain the same, while 47% say it should be more aggressive.
Policy decisions can also have a personal impact on private business owners. With the federal gift and estate tax exemption scheduled to expire in January 2026, 74% of owners state they plan to do additional estate planning before the expiration date to take advantage of the current level, while 16% are doing nothing, citing their belief that it will not decrease.
Owners Face Complex Challenges With The Future Of Their Businesses, Including Succession Plans
For many private businesses, the future depends on whether the company decides to pass leadership to the next generation or sell. 45% of private business owners reported the top reason they would not consider selling some or all of their business over the next 12-24 months is that they identify with their business too much to give it up.
On the other hand, 91% of private business owners say it is important for their business to remain in the family for the next generation. While nearly all (99%) of private business owners say they have taken steps to prepare the next generation to take over, 74% also state that roles for the next generation are either not well-defined or have not fully been communicated.
“The best way to engage the next generation early is to figure out where their passions and interests lie and then explore areas of the business to apply these passions,” said Ben Persofsky, managing director and executive director of the BBH Center for Family Business. “If the next generation feels a genuine connection to the business, they’re more likely to find purpose and meaning within it.”
Common challenges faced by private business owners surveyed include differing thoughts about business strategy (42%), feeling compelled to hire a family member (42%), and the possibility that work disputes will damage family relationships (39%).
For the second year in a row, private business owners report they are willing to give up part or all of their control and ownership (46%) or are willing to sacrifice growth (35%) to maintain dividend payments. In the 2023 survey, 33% said they would be willing to relinquish control or ownership to maintain dividends.
“When it comes to succession, we help leaders not only acknowledge the impending major transition in their lives, but also focus on the journey ahead,” said Kathryn George, a partner of BBH. “By default, many focus on the destination, but it is important that the focus be set on how the transition is done. This is true whether business ownership is staying in a family or will be sold to a third party.”
Navigating Communication With Family Around Wealth, Concern For The Next Generation
Every private business owner surveyed says they have an estate plan, and 91% say their plan aligns with their values. Despite this, 97% report factors that have prevented them from communicating their estate plans to family. The top two reasons are concern over whether their plan is right (66%) and emotional discomfort (55%).
Concerns for the next generation extend beyond the bounds of the business: More than one-third (38%) of those surveyed say they are concerned that family members will be taken advantage of because of their wealth and 32% worry that wealth will affect their children’s motivation to be productive and independent.
