A new BMO survey revealed that despite meaningful progress, women entrepreneurs are still behind in critical aspects of business financial planning, transition planning and financial literacy compared to their male counterparts. The research found 64% of women business owners do not have a detailed financial plan for their companies, compared to 59% of men. In fact, as reflected in the data below, women business owners are significantly less likely to have considered how to manage many financial situations associated with their business.
| Business Financial Plan Considerations |
Women | Men |
| Personal and business tax strategies | 76% | 85% |
| Business growth and value creation strategies |
78% | 83% |
| Contingency plans | 64% | 76% |
| Business liquidity alternatives | 60% | 76% |
| Stakeholder wealth transfer strategies |
61% | 73% |
| Philanthropic strategies | 57% | 65% |
“The importance for all business owners – but particularly women business owners – to have a financial plan for their companies cannot be overstated,” Shannon Kennedy, head, U.S. Advisory and Interim U.S. CEO, BMO Wealth Management U.S., said. “Women tend to live longer, face industry-specific financial hurdles and center their wealth planning around their families. Having a detailed financial plan for their business is vital to ensuring continued growth and expansion, business owner’s overall personal financial wellbeing, and making certain their families are taken care of. BMO has long supported women business owners and their unique wealth planning needs, and we look forward to continuing to be a leading partner for our clients to help them make progress.”
Transition Planning: An Unwritten Next Chapter
While having a well-considered transition plan is essential for the enduring success of any business, only a third (33%) of women business owners have a detailed plan compared to over half (52%) of men. Among the 25% of women business owners who do not have transition plans, the three main reasons cited include not having plans to sell their business (39%), never considering having a transition plan (25%), and not having plans to retire (21%).
There are several aspects of a business transition plan many women business owners say they have yet to consider:
- Women business owners are 10% less likely to consider strategies on how to transition out of their company without giving up control.
- Nearly a third (32%) of women business owners have yet to consider or incorporate plans that will create the right incentives to prepare the next generation or key persons to take over the business.
- 31% have not yet incorporated plans that allows them to access the equity in their business that helps them prepare for retirement and/or achieve other personal goals.
“Business owners have dedicated countless hours and resources to set up and grow their businesses, but many do not have a critical transition plan in-place,” Kaitlin Skopec, director, Corporate Advisory, BMO Commercial Bank, said. “Transition planning is a vital and necessary tool for business owners to ensure the enduring and lasting success of their companies. It safeguards employees, stakeholders, family members — and most importantly, the business owner — from unexpected changes and external forces that are beyond their control. It is not about ‘thinking about the end’, it is about planning for the future. It is never too early to start thinking about a transition plan.”
To learn more details about this survey, please visit: BMO for Women Survey: The State of Financial Planning for Business Owners – BMO Wealth Management
