Press Releases
PRESS RELEASE
Marketing Department
P.O. Box 250
Evans City, PA 16033
Contact:
Lauren W. Way
Marketing Communications Manager
724.538.2205
lway@thebank.com
Most western Pennsylvania small businesses are not prepared to transition ownership, survey finds
EVANS CITY, PENNSYLVANIA – February13, 2007 – A recent study provided evidence that small, privately owned businesses in western PA are in need of various types of support, especially in the area of succession planning.
NexTier Bank’s advisory group to privately held businesses, The Family Business Center at NexTier, and Grove City College’s Entrepreneurship Program conducted a research study late last year to determine the kind of resources needed by privately owned businesses in western PA.
Especially significant was the finding that more than half of the businesses (58%) had not given any thought to creating a formal written succession plan. Of those with a succession plan, 45% plan to sell their business to an outside buyer while 39% plan to transition the business to a family member.
Other significant findings included:
The survival rate among family-owned businesses in Western Pennsylvania is similar to national trends.
The survey found that 65% of the businesses surveyed are first generation businesses, 25% second generation, 8% third generation and only 3% were fourth generation businesses. These findings were similar to a national study conducted three years earlier by Raymond Institute/Mass Mutual.
Finding good employees and cash flow were the most commonly reported challenges of business owners.
Thirty two percent of respondents cited finding good employees as a key challenge, while 17% indicated cash flow was a pressing issue.
Among family businesses where more than one family member is employed, most reported that their relationships are effective. “That 67% of respondents classified their relationships as ‘very effective’ was a surprise,” stated Rich Snebold, co-founder of The Family Business Center at NexTier. “We typically find that that there are issues that cause a great deal of strain in the personal and work relationships of family members involved in the business, so we would have expected this number to be much lower.”
Business owners find accountants and other business owners to be the most helpful advisors.
Forty six percent of respondents cited accountants as “very helpful.” “Interestingly, we’re seeing more and more business owners look to their peers for help,” Snebold commented about other business owners being the second highest rated source of advice.
About the Survey
In collaboration with NexTier’s marketing research team and The Family Business Center at NexTier, students of Grove City College’s Marketing Research class, under the instruction of Professor Scott Powell, conducted a study of small, privately held businesses in western PA. Primary research was conducted using a two-page mail survey consisting of 15 questions to a mailing list of 1,296 participants. The list was developed based on the following criteria: 1) businesses located in Mercer, Lawrence, Beaver, Washington, Allegheny, Westmoreland, Armstrong, Butler, Clarion and Venango counties 2) annual sales between $500,00 and $30 million and 3) 5 to 100 employees. There were 297 surveys completed and returned, indicating a 23% response rate. The students compiled the results and presented the findings to NexTier in December 2006.
About NexTier Bank
NexTier Bank is an innovative, full-service financial institution with the goal of assisting the privately held business owner with expertise and comprehensive business solutions. NexTier’s 16 community offices serve Butler, Armstrong, and northern Allegheny counties, as well as Radnor, PA. NexTier has more than $480 million in assets and 300 employees. NexTier, Inc. includes NexTier Bank, NexTier Insurance Services, The Family Business Center at NexTier, NexTier Wealth Management, NexTier Mortgage, NexTier Armored Services, and Radnor Trust Company. Information about NexTier is available at thebank.com, the Family Business Center, familybizcenter.com, or by calling 1.800.262.1088.
About Grove City College
Grove City College is a four-year private institution known for its unique blend of challenging academics, Christian environment and affordable cost. It is consistently and highly ranked by U.S. News & World Report, Princeton Review, Peterson’s, the Intercollegiate Studies Institute, and Barron’s. Additional information is available at www2.gcc.edu/dept/busa/entrepreneurship/.
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