3 Out of 4 Small Business Owners Say Economic Conditions in
Country Getting Worse; Economy Rates as Most Important Issue in
Presidential Race
Health Care Poll: 77% of Small Business Owners Do Not Offer Health
Insurance to Employees
RIVERWOODS, Ill.--(BUSINESS WIRE)--Jan. 28, 2008--Few small
business owners started out the year with confidence in the direction
of the U.S. economy, according to the Discover Small Business Watch.
The monthly index fell nearly 6 1/2 points in January to 86.3, the
second-largest point tumble in the 18-month existence of the poll. The
index has been steadily decreasing since July, when it was 107.3.
"We have a significant increase this month in the number of small
business owners who think the overall economy is getting worse," said
Sastry Rachakonda, director of Discover's business credit card. "Cash
flow has dipped and spending on business development is down, which
causes concern in this sector. However, the numbers that measure
owners' confidence in their own businesses have been fairly constant.
It is too early to tell whether any of the proposed stimulus plans are
affecting the mood of the small business segment of the economy."
January Key Findings:
- 74 percent of small business owners feel that economic
conditions in the U.S. are getting worse, a jump from 65
percent who felt that way in December.
- 44 percent said they have experienced cash flow issues over
the last 90 days, also a slight increase from 42 percent in
December but significantly more than the 32 percent in January
2007.
- 35 percent of small business owners picked the economy by far
as the most important issue in the presidential campaign. The
war in Iraq was a distant second at 14 percent; followed by
government ethics and corruption, 13 percent; immigration, 11
percent; health care, 9 percent; national security, 8 percent;
Social Security, 4 percent; and some other issue, 2 percent.
Six percent were not sure.
- 26 percent of small business owners rate the U.S. economy as
excellent or good, which is lower than the 29 percent in
December who felt the same, and the lowest since surveying
began in August 2006
Poll: Few Small Business Owners Offer Healthcare; High Costs
Hamper Growth
Healthcare costs continue to be a financial burden for small
businesses, according to this month's poll, which found that 77
percent of small business owners do not offer health insurance to
their employees, up from 74 percent last year.
Thirty-nine percent of small business owners said that the cost of
health care has a major impact on their ability to grow, while seven
out of 10 said that obtaining affordable health insurance for
themselves and their employees was very difficult (51 percent) or
somewhat difficult (18 percent).
"Healthcare costs were having a big impact on businesses when we
did this survey one year ago," said Rachakonda. "This year's survey
shows that the situation has only worsened. Nearly four out of 10
entrepreneurs feel that healthcare costs have a major impact on their
ability to grow."
Key Healthcare Poll Findings:
- 25 percent of small business owners said they are currently
uninsured, up from 18 percent who said the same last year.
- Only 15 percent of small business employers offer health
insurance to their employees. Of those, 40 percent have
considered discontinuing it because the cost is too high - a
number that increased from 33 percent last year.
- Among those small business owners who do have healthcare
coverage, 27 percent are insured by another family member's
plan, while 35 percent have purchased coverage separately.
- 34 percent of small business owners said their employees go
without health insurance.
"Small business owners have to be flexible and resourceful to find
health insurance for themselves and their families," Rachakonda said.
"But for those whose spouses don't have health benefits, or for those
who can't afford to purchase a plan, they are simply going without."
Small businesses that cannot find a way to provide health
insurance for their employees should expect to have a more difficult
time recruiting talent. In a survey of 4,000 consumers, 49 percent
said that health benefits were very important to them when seeking
employment, while another 23 percent said coverage somewhat important
in their decision to select a new job.
The views and opinions expressed by small business owners and
consumers who participate in the Small Business Watch survey are their
own and do not necessarily reflect those of Discover Financial
Services or its affiliates.
About the Small Business Watch
The Discover Small Business Watch is a monthly index measuring the
relative economic confidence of U.S. small business owners who employ
less than five employees, a segment that consists of 22 million
businesses producing more than a trillion dollars in annual receipts.
The Watch is based on a national random survey of 1,000 small business
owners. It is commissioned by the Discover Business Card, which
strives to offer the best business credit card for American small
businesses, and is conducted by Rasmussen Reports, LLC
(www.rasmussenreports.com), an independent survey research firm. The
numeric index is calculated by assigning values to responses to a set
of six consistent questions. The base value of the Watch was
established at 100.0 based on surveys conducted in August of 2006. In
addition to generating the index, the Small Business Watch surveys
small business viewpoints on key business drivers, and also surveys
4,000 consumers to gauge purchasing behavior and attitudes towards
small businesses. For past results and small business survey data,
visit www.discovercard.com/business/watch. For information on Discover
Business Card, visit www.discovercard.com/business.
About Discover Financial Services
Discover Financial Services (NYSE: DFS) is a leading credit card
issuer and electronic payment services company with one of the most
recognized brands in U.S. financial services. The company operates the
Discover Card, America's cash rewards pioneer. Since its inception in
1986, the company has become one of the largest card issuers in the
United States. Its payments businesses consist of the Discover
Network, with millions of merchant and cash access locations, and
PULSE, one of the nation's leading ATM/debit networks. Discover also
operates the Goldfish credit card business in the United Kingdom. For
more information, visit www.discoverfinancial.com.
CONTACT: Discover Financial Services
Jon Drummond
224-405-1888
or
Robinson Lerer & Montgomery
Daniel Delson
646-805-2036
SOURCE: Discover Financial Services