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Business ownership: Who's in, who's out, who's holding back

From the runaway popularity of television’s Shark Tank to the iconic status of Steve Jobs and Jeff Bezos, Americans are fascinated by entrepreneurialism. Today, nearly 60% of wealthy investors would consider starting a business of their own.

At the same time, more than 40% of current business owners are preparing to exit. In this issue of UBS Investor Watch, “Who’s the boss?”we examine these two trends. Together, they will undoubtedly impact the face of business—and the wealth it creates—for years to come.

The recent tax and regulatory reform and continued economic expansion have increased the allure of owning a business. Many wealthy investors would consider starting a business now or in the near future.

On the other hand, the economic environment is spurring some business owners to cash out. More than 40% plan to leave their business in the next five years. Of those, half plan to sell.

It remains to be seen, however, who will fill the void. While Millennials are the most inclined to start a business, they are conflicted about following through. More than any other generation, they believe starting a business is far too risky and inflicts high levels of stress.

In addition, Millennials make reluctant successors. Four in five current business owners say their children would rather inherit money from the sale of a business than the business itself.

As engines of commerce, employment and wealth creation, business owners play a critical role in the economy. In a changing landscape, some investors will take on that role—and some will simply watch it on Shark Tank.