Business owners' economic optimism has reached its highest point in three years, according to new research from the
Principal Financial Well-Being Index: Business Owners, found that 40 percent of American business owners feel optimistic about the economic outlook for 2015, showing significant improvement from 26 percent in the 2012 survey looking at the economic outlook for 2013.
According to a company release, this rosier outlook follows a strong year for America's small to mid-sized businesses; 53 percent of business owners say their company's financials have improved compared to last year. Business owners are also increasingly confident in their outlook for the overall health of their businesses. This year's survey found that more than half (54 percent) believe their business financials will improve in the coming year and almost nine-out-of-ten (88 percent) business owners rate the financial health of their business as either stable or growing. Additionally, 71 percent have surplus business capital, up from 62 percent in 2013.
On a personal level, most business owners report that their household finances are in good order. Seventy-five percent of business owners see themselves as financially healthy, up from 71 percent in 2013.
"It's very exciting to see business owner confidence reach its highest point in the three years," said
The Principal Financial Well-Being Index: Business Owners surveyed 600 business owners nationwide who own at least 5 percent of a company in
With a positive outlook for the future of their businesses, almost half (46 percent) of business owners are reinvesting profits back into their companies to help secure the future of their businesses. Additionally, some business owners are safeguarding their companies' futures by enhancing their firms' technology (37 percent), or taking steps to protect their businesses from unexpected losses (36 percent).
Hiring is also on the rise. Forty-one percent of business owners added full-time staff in the past year, citing customer demand (37 percent), high volumes of business (36 percent) and confidence in future growth (31 percent) as the top reasons for growing their workforce. Likewise, 41 percent plan to add staff in the year ahead, up from 35 percent in 2013.
Retaining top talent is a major focus for business owners striving to stay ahead of the competition. Forty-three percent of business owners are focusing on addressing the challenges of retaining talented employees. In order to keep employees loyal, happy, and healthy, 33 percent of business owners reported providing competitive benefit packages. More business owners plan to add employee benefits in the next 12 months, with 22 percent of respondents pledging to offer additional employee benefits next year, up from only 16 percent in 2013.
"Whether business owners are reinvesting profits back into their businesses, securing new technology to increase operational efficiency, bolstering their benefits packages to attract and retain top talent, or hiring new staff, these actions all indicate that business owners are more confident in their businesses and are taking the proper steps to ensure their future," said Friedrich.
Other key findings include:
-The Affordable Care Act: Business owners are becoming more familiar with The Affordable Care Act (ACA), with almost three quarters of them (73 percent) saying they understand it as compared with just 42 percent the year before. With greater understanding may come greater comfort; significantly more business owners feel that the ACA will have a positive effect (23 percent vs. 12 percent in 2013) and significantly fewer feel it will have a negative effect (36 percent vs. 48 percent in 2013).
-The Impact of a Rising Minimum Wage: 42 percent of business owners feel that the proposed minimum wage hike will have no effect on their businesses, with sentiment split evenly (26 percent each) on whether it will negatively or positively impact their businesses. Business owners with fewer than 50 employees were more likely than larger businesses to anticipate that the minimum wage hike would have no effect on their business (52 percent).
-Maintaining a Work/Life Balance: Business owners are very mindful of the importance of work/life balance. Almost half of business owners (48 percent) say they take vacation time or use technology so they can work from anywhere they want. Forty-three percent schedule time for exercise, and 39 percent say they have adequate staffing so that they can be away from the office.
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