American small business owners reach a six-year high for optimism
While optimism is up, women business owners are cautious
Principal Financial Group® today released findings from the Principal Financial Well-Being Index (PDF), an annual survey of America’s small to mid-sized business owners. The survey shows a record 58% are feeling optimistic about the economic outlook for 2018. This positive sentiment has been trending upward since 2012.
The survey shows that 92% of business owners feel their business’ financial health is growing or stable, and 81% feel they’re personally financially healthy. Additionally, business owners continue to hire, as 67% have added staff over the past year. That said, younger business owners are the most likely to hire: an overwhelming 84% of millennials added employees in the last 12 months, compared to only 70% of Gen-Xers or 49% of Boomers.
“This is an impressive uptick in optimism, as only 26% of small to mid-sized business owners were optimistic five years ago,” said Amy Friedrich, president of the U.S. insurance division at Principal®. “It’s encouraging to see that business owners still feel confident, and they’re proving this with the investments they’re making.”
Some other tell-tale signs that optimism is strong:
- 84% believe they’re making good progress toward achieving long-term financial goals
- 73% are extremely happy with their current financial well-being
- 72% report having surplus capital
- 72% feel adequately protected against risk events
“I think the recovery from the economic ugliness in 2015 and early 2016 caused by the dollar’s surge and oil’s price collapse is dissipating. And with it, some of the leftover fear and dread of relapse that lasted so long after the financial crisis is also clearly fading,” said Bob Baur, chief global economist at Principal. “Consumers and businesses were living in the shadow of the financial crisis for seven or eight years. Now, it’s going away.”
Business is booming, but women are cautious
While 94% of male business owners were likely to categorize their business as growing or stable, only 89% of female owners agreed. Women were more likely than their male counterparts to say their business is struggling to stay afloat (6% vs. 1%). Female business owners are also more likely to say health care costs will have the greatest impact on their business decisions (23%) compared to male business owners (13%).
“It’s interesting for us to see that among all the optimism, women are a bit less positive than men,” added Friedrich. “It’s no surprise to anyone that men and women approach problems differently. Time will tell whether that sentiment represents more realism or more caution.”
About the Principal Financial Well-Being Index
The Principal Financial Well-Being Index: Business Owners surveyed 639 business owners nationwide that employ 10 to 500 American workers. This group owns at least 5% of a company that they’re actively involved in managing and are not in business of government or not-for profit organizations (such as agencies, school districts, community owned hospitals, or public universities). The Index is part of a series of studies commissioned by The Principal Knowledge Center examining the financial well-being of American workers and business owners. The survey was conducted online by Harris Poll® from July 18-August 7, 2017.
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