By Abby Schultz
The vast majority of American entrepreneurs -- more than 94% -- are optimistic about their future business prospects, a new survey shows. And the election of Donald Trump as president might make their outlook even brighter.
The survey from HSBC Global Private Banking was conducted before the Nov. 5 election so their optimism probably has only been enhanced by the expectation that Trump's proposals for tax cuts and deregulation will be implemented with the help of a Republican-led Congress, Racquel Oden, the bank's U.S. head of wealth and personal banking and global private banking, told Barron's.
Despite not knowing the specifics of what's to come, the entrepreneurs surveyed expect the Trump White House "to support me and the growth of my business," Oden said.
Of the survey's 1,800 participants from 10 countries, 90% believe their personal wealth will get better in the future. Worldwide, 46% believe their personal wealth will get "a lot better" and 45% believe it will get "a little better. In the U.S., 48% said "a lot better" and 41% said "a little better." All the entrepreneurs have at least $2 million in investible wealth and nearly a third have a net worth of more than $100 million.
Their optimism is in contrast with the 47% hope level of the world's population, according to the survey, which cited a study by Ernst & Young.
So many entrepreneurs are optimistic because they see themselves largely in control of their futures. Of those surveyed, 56% said their optimism has to do with "business opportunities and performance" and 52% cited their abilities as business owners.
External factors play less of a role. Investment portfolio performance was cited by 49% and macroeconomic factors, including inflation and interest rates, was cited by 31%.
Being an entrepreneur isn't exactly easy, though. The report details personal stresses from loneliness to lack of work-life balance, and more general stress about the state of the world. In particular, entrepreneurs worry about geopolitical instability, and regulatory and legislative changes, the report said.
To deal with these outside worries, they diversify. They tend to live in more than one country -- 55% are considering a move within the next 12 months -- and they spread their business interests to multiple locations.
"Deteriorating relations" between two of one entrepreneur's major markets, for example, is prompting him to consider setting up factories in another country to avoid tariffs, the report said.
About a third of the respondents -- 31% -- cited inflation as their biggest concern. Climate change came in second with 24%. In contrast, the public puts climate change at No. 8, according to HSBC, citing Ipsos Global Advisor.
"This suggests that ESG concerns are now indelibly on all business agendas," the report said.
When asked how they typically spend their personal wealth, 63% of respondents said investments and 51% said cash.
So many answered cash because business owners want to be able to act quickly and have access to cash for unexpected, short-term business needs, Oden told Barron's.
"That's part of being an entrepreneur -- they want to be able to access cash quickly if there's an emergency or something happens."
Write to Abby Schultz at abby.schultz@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 15, 2024 11:12 ET (16:12 GMT)
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