August 22, 2017
Business Owners Are Putting the Future of Their Companies at Risk
Owners say it’s important to prepare for cyberattacks, disasters and succession, but most lack formal plans as reported in a Nationwide survey; Millennials and African Americans are the most prepared to face risks
Nationwide’s annual survey of business owners reveals they are unprepared for the future or unexpected events — even though they acknowledge the importance of best practices to protect their livelihoods, employees and customers.
Most business owners say it’s important to plan for cyberattacks, natural disasters and succession. But the vast majority of owners report they don’t have formal plans in place, even as catastrophic weather events continue to rise and ransomware attacks become more common. These findings stem from Nationwide’s third annual survey of more than 1,000 business owners across the country with 1-299 employees.
“Business owners are the backbone of our economy,” said Mark Berven, president of property and casualty for Nationwide, the No. 1 total small-business insurer in the country.1 “But they can often believe the myth that ‘it could never happen to me.’ That’s why it’s crucial business owners remain prepared. Whether it’s planning for leadership succession or enduring an unexpected event like a cyberattack, the viability of businesses across the country is a requirement for a healthy economy that we can’t ignore.”
Nationwide’s survey asked business owners to report their experience across a wide range of topics, and results revealed alarming discrepancies in how business owners think versus how they behave in three main categories:
- Cyberattacks: 83 percent of owners report that they believe it’s important to establish security practices and policies recommended by the U.S. Small Business Administration (SBA) to protect sensitive information, but only 50 percent say they have established security practices to protect sensitive information.
- Disasters: 64 percent of owners say it’s important to create a preparedness program as recommended by the SBA, yet only 23 percent report that they have created one.
- Succession: 65 percent of owners report that they believe it’s important to choose a successor for their business as recommended by the SBA, even though only 37 percent actually have a business succession plan in place.
While many business owners are not prepared for the risks they face, two exceptions stood out.
- Millennials are more likely than Baby Boomers or Gen Xers to say it’s important to create a business succession plan (38 percent) and build disaster preparedness kits (35 percent). They say they are also more confident in securing a financial future (82 percent).
- African-American business owners are more likely than Hispanic or Caucasian owners to say they have a plan in place to protect employee data (56 percent), a disaster recovery plan (46 percent) and a cyber-attack response plan (41 percent). They also report that they are more confident in securing a financial future (86 percent).
To help business owners prepare and protect their businesses for the future, Nationwide recently launched the Business Solutions Center, a new online suite of solutions that can support them during key stages of development.
The site is designed to help owners identify a wide variety of needs. It also links users to other sources of information that support entrepreneurs, including Nationwide’s team of Loss Control Services consultants.
Learn more on Nationwide’s blog page.
Nationwide commissioned a 20-minute, online survey among a sample of 1,069 U.S. small business owners. Small business owners are defined as having between 1-299 employees, 18 years or older, and self-reported being a sole or partial owner of their business. The margin of error for this sample is +/-3% at the 95% confidence level. Conducted by Edelman Intelligence, a full-service consumer research firm, the survey was fielded between May 16-24, 2017. As a member of CASRO in good standing, Edelman Intelligence conducts all research in accordance with Market Research Standards and Guidelines.
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor’s. The company provides a full range of insurance and financial services, including auto, commercial, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; banking and mortgages; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com.