Timing is everything

One of the most difficult decisions facing a business owner is when to transition ownership. After all, most want to get a fair price. They want to see the company continue to grow and prosper. They want to transition to retirement knowing they did what they could to maintain the company legacy.

The health of the overall economy, and the confidence that it will continue to thrive, are some of the key factors impacting timing of succession. These factors also directly impact valuation for most companies, which is another key driver in the timing decision.

So how are people feeling now? The recent Principal Financial Well-Being Index asked business owners how they feel about the economy and their outlook for their companies.

The percentage of business owners that are optimistic about the economic outlook has continued to rise. In 2013 just 31% of business owners were optimistic. Three years later it increased to 50%.  In 2013, 44% were cautious. That fell to 30% in 2016.

well being index

The survey also asked about company actions and perceptions as well. Some key findings:


Combined, these factors point toward the potential of a great environment for the growth of Employee Stock Ownership Plans (ESOPs). A healthy economy and optimistic outlook are generally positive factors when determining company value.  These factors can also lead to a more competitive environment for attracting and retaining staff making an ESOP a valuable benefit.

If you would like to learn more about the ESOPs and how they could potentially benefit you please visit www.principal.com/esopedge.

You can see more about the Principal Financial Well-Being Index at:


In addition to blogging here, I also tweet regularly about topics of interest to ESOPs.

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The subject matter in this communication is provided with the understanding that Principal® is not rendering legal, accounting, or tax advice.  You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

t16092103ce – 9/2016