Business Owners Report Business Health Improving, But No Plans to Spend
Economy, health care and taxes top concerns for presidential election
DES MOINES, Iowa--(BUSINESS WIRE)-- American business owners are optimistic about the health of their businesses but lack confidence in the economy, according to new research from Principal Financial Well Being IndexSM: Business Owners. With Election Day quickly approaching, business owners say the state of the economy is the financial issue that will have the biggest impact on their vote, followed by health care reform and taxes.
Almost half of those surveyed (47 percent) say their business financials improved compared to a year ago and more than half (58 percent) believe their financials will improve in the next 12 months. But when it comes to the broader picture, nearly half of those surveyed (46 percent) are cautious about the economic outlook for 2013, and two-thirds are holding off on making long-term financial commitments because of the current state of the economy.
"While owners of small to medium-sized businesses report growing confidence in what they can control - their own companies - they do so with a healthy dose of caution in the context of the overall economy," said Amy Friedrich, vice president of the Principal Financial Group®. "As these owners prepare for Election Day, the economy will not only influence their vote, but also their long-term plans for spending."
Business owners are also reluctant to spend cash. Sixty-three percent said they have surplus capital, but almost three-quarters (73 percent) of those who have surplus capital are not spending any of it. Still many business owners plan to grow their businesses in the near term. Forty-two percent plan to add staff in the next year and almost one-third (31 percent) plan to expand business operations in the U.S.
The Principal Financial Well-Being Index: Business Owners, which surveys American business owners of small to medium-sized businesses with 10 to 500 workers, is part of a series on the financial well-being of Americans released quarterly by the Principal Financial Group. The survey is conducted online by Harris Interactive®. This is The Principal's first survey on the financial well-being of the American business owner.
State of the economy, health care driving decision-making
The same financial issues swaying business owners' votes are also influencing how they run their businesses. Health care and the economy are top-of-mind, with more than half saying health care costs (57 percent) and economic growth (54 percent) are impacting their business decisions. Other top issues include uncertainty of taxes (45 percent), gas prices (43 percent), unemployment (37 percent) and inflation (36 percent).
It comes as no surprise that health care is a priority for business owners in both the political world and the business world. One-fourth (24 percent) rate their top concern for the well-being of their business as managing the cost and administrative responsibilities of health care and another 24 percent say understanding how health care reform impacts their business is their top concern.
Health care costs spur interest in wellness
While business owners may not be able to control or predict the future of health care, many are turning to wellness programs to improve employee health and reduce risks. Nearly two-thirds of those surveyed (64 percent) offer some form of wellness benefit to their employees.
"With lingering ambiguity around health care reform, the challenge of managing health care costs can be overwhelming for owners of small and mid-sized businesses," Friedrich said. "Business owners are seizing opportunities to take action amidst this uncertainty and experiencing positive results."
Among businesses that offer wellness benefits, almost one-third (32 percent) have experienced lower health insurance costs. Business owners report wellness programs have contributed in other ways:
Employees are more productive at work (47 percent),
Increased employee retention (42 percent),
Less time away from work (37 percent)
Better employee engagement (36 percent).
View the full survey results at www.principal.com/wellbeing
Download the full infographic.
This Principal Financial Well-Being IndexSM survey was conducted online within the United States by Harris Interactive on behalf of the Principal Financial Group® between August 7 and August 27, 2012 among 604 business owners in companies of 10-500 employees. The data have been weighted to reflect the composition of the small to mid-sized U.S. businesses. This is one in a series of annual studies to identify and track changes in the perceptions of business owners of small and mid-sized businesses. The first Principal Financial Well-Being IndexSM survey was conducted in the United States in 2000.
For more news and insights from The Principal, connect with us on Twitter at http://twitter.com/ThePrincipal.
About the Principal Financial Group
The Principal Financial Group® (The Principal ®)1 is a global investment management leader including retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $367.1 billion in assets under management2 and serves some 18.2 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
1 "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
2 As of June 30, 2012.
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