Only 19 percent of owners say they plan to increase spending on business development over the next six months, the lowest number for this category in the Watch’s 30-month history. Forty-six percent say they plan to reduce spending on business development and 30 percent are not making any changes.
Another factor in this month’s decline in optimism is a decrease in the number of small business owners who see economic conditions for their businesses improving. Seventeen percent of small business owners believe that economic conditions for their businesses are getting better, down from 21 percent in December. Those who feel conditions are getting worse is unchanged at 51 percent, while 25 percent feel conditions remain the same, up slightly from 23 percent last month.
Other January Findings:
- Only 8 percent feel the economy is improving, down from 12 percent in December. Sixty-nine percent of owners think the U.S. economy is getting worse and 17 percent see no change, which is largely in line with December.
- The number of owners who say they have experienced temporary cash flow issues in the past 90 days decreased in January to 38 percent from 42 percent in December.
- 61 percent rate the economy as poor, down from 63 percent in December and 65 percent in November; only 6 percent rate the economy excellent or good, mirroring December’s results, while 33 percent describe the economy as fair.
Fewer Small Businesses Offering Healthcare to Employees
Eighty-five percent of small business owners say they do not offer health insurance to their employees, up significantly from 77 percent a year ago and 74 percent in January 2007. Among small business owners who do offer health insurance, 36 percent say they have considered discontinuing coverage because of high costs.
A third of small business owners say healthcare costs have a major impact on their ability to grow their business: 69 percent say that obtaining affordable healthcare for themselves and their employees is "very" or "somewhat" difficult, which is unchanged from last year.
"Over the last two years, the number of small business owners who offer health insurance to their employees has fallen significantly," said Scully. "While small business owners are finding ways to stay afloat in this tough economy, eliminating healthcare benefits could be another measure of the cost of that resiliency."
Additional healthcare findings include:
- When asked whether any of their employees go without any health insurance, 28 percent of owners said yes, 49 percent said no and 23 percent weren’t sure.
- 25 percent of small business owners are uninsured, which is unchanged from a year ago and up from 18 percent in January 2007. For the remaining three-fourths of owners, 11 percent get insurance through a company plan, 29 percent obtain insurance through a family member’s plan and 32 percent purchase it separately.
- Among consumers, healthcare benefits were a selling point for 68% of them in their decisions to accept their current jobs. In the Watch’s survey of 4,000 consumers, 43 percent say healthcare benefits were "very important" when accepting their current job, 25 percent say they were "somewhat important," 18 percent answered "not very important," 9 percent said "not at all important" and 5 percent weren’t sure.
53% of Owners Say They Will Not Have to Raise Funds to Stay in Business
When asked whether they will have to raise money this year in order to keep their businesses running, 53 percent of small business owners say they will not, while 32 percent expect to need additional funds, and 15 percent were not sure.
Of those who say they will need extra money to stay afloat:
- 20 percent will look first to friends and family
- 19 percent will tap personal savings
- 18 percent will seek a bank loan
- 9 percent will use credit cards
- 1 percent will apply for a home equity loan
- 24 percent will choose some other form of funding
- 10 percent weren’t sure
