Factors Related to the Financial Vulnerability of Small Business Owner-Manager Households

We investigate financial vulnerability of households with small business owner managers, using 1992 to 2007 Survey of Consumer Finances datasets. Based on regression analyses of two ratios, business assets to total household assets and business income to total household income, we find that vulnerability in terms of both ratios increases with the number of employees and the number of years in business. The income ratio increases with age up to age 48, then decreases. Black households are less vulnerable (have lower income ratios) than White households. Single head households are more vulnerable than married couples in terms of the business to household income ratio. Those willing to take substantial investment risks have higher business asset ratios than those unwilling to take any risks