The Principal Financial Well-Being IndexSM: Business Owners
Business owners' economic optimism has reached its highest point in three years, according to new research from The Principal Knowledge Center. This rosier outlook follows a strong year for America's small to mid-sized businesses. Business owners are also increasingly confident in their outlook for the overall health of their businesses.
Key findings include:
Small- to medium-sized business owners’ outlook on the economy and business financials
- Four in ten business owners are optimistic about the economic outlook for 2015, a significant increase from 31 percent the previous year. Almost four in ten business owners (39%) say their sentiment regarding the economic outlook for 2015 is cautious.
- Just over half (54%) of the business owners say their business financials have improved compared to last year at this time. Fifty-four percent believe their business financials will improve in the next twelve months.
- Almost nine of ten (88%) business owners rate the financial health of their business as either stable or growing.
Business owners’ plans for spending
- Seven in ten (71%) business owners have surplus capital. When looking at only the business owners who have surplus capital, almost three-quarters (73%) of them aren’t spending any of it now.
- Almost three in ten (29%) of business owners have no business surplus capital, a significant decline from 38% in 2013.
- Four in ten (41%) business owners plan to add to staff (up from 35% last year) while 8% percent plan to reduce staff.
- One in five (22%) plan to add employee benefits, a significant increase from 16% in 2013.
Current business challenges
- Over half of the business owners say they are challenged with growing the business (57%), attracting new customers (56%) and maintaining customer satisfaction (51%).
- Over four in ten are challenged with maintaining a competitive edge over competitors (46%) and retaining talented employees (43%).
NEW! Third quarter 2014 research on Business Owners:
The Principal Financial Well-Being Index: Business Owners surveyed 600 business owners nationwide who own at least 5 percent of a company in the United States with 10 to 500 employees, and are actively involved in company management. The Index is part of a series of quarterly studies commissioned by The Principal Knowledge Center examining the financial well-being of American workers, business owners and advisor opinions and practice management. The survey is conducted online by Harris Poll®.