Small Business Tracking Study
Wave 1: May 2015
It’s our business to know your business
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We strive to understand
everything we can about the
Small Business segment
to understand their perceptions,
challenges & needs over time
across areas that small businesses need to make the day-to-day of their
business run: Technology, Healthcare, Finance and Insurance
OUR GOAL: Make our marketing work harder for you by digging deeper
and getting smarter about our audience
3 Source: Constant Contact survey 2014
Small businesses will continue to face challenges every day…
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How do I find a work/life balance?
How do I stay ahead of the competition?
How can I be on-the-go all the
time and run a business?
How do I stay on top of new
innovations?
How will the economy affect my business?
I need to reach more customersHow will I grow
my business?
I need to find & keep talent
Are there any new government
regulations?
How do I up my social
game?
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Coffee Shop
We are tracking trends to better speak with small businesses. We want to know what makes them tick, what keeps them going, what is top of mind every day and every minute.
Most importantly, what are their hurdles to being successful?
We have begun our first conversations and created a baseline
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505 small business decision-makers reached through an online survey
40%
21%
13%
13%
11%Number of Employees2 to 4
5 to 910 to 1920 to 4950 to 99
18% Home-based
All across the U.S. and different make-ups:
14% 19% 17% 19% 21% 9%
Revenue Split
$25-100K $100-250K $250-500K $500K-1M $1M-2M $5M+
Years in Business23% 1 to 5 years
22% 6 to 10 years20% 11 to 19 years35% 20+ years
14% Construction-based
Overall, small business owners believe their businesses are growing and are optimistic for the future
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Last year, did your business experience…
Rapid growth (more than 10%) 14%Slow but steady growth 45%No change 28%Slow but steady contraction 10%Rapid contraction (more than 10%) 3%Not sure 1%
Next year, do you think your business will have…
Rapid growth (more than 10%) 19%Slow but steady growth 50%No change 22%Slow but steady contraction 6%Rapid contraction (more than 10%) 1%Not sure 2%
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We asked small business owners about different aspects of running their businesses
Finance TechnologyInsurance Healthcare
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Interesting insights and takeaways from other areas
Finance TechnologyInsurance Healthcare
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Small business owners are upgrading but being kept up at night by cyber security concerns
Keeping up with hardware and software upgrades is the #1 technology initiative businesses deal with, followed by mobile access, social media
presence, and especially cyber security.
Companies that have undergone rapid growth in the last year are far more concerned about their technology needs than other companies.
The faster the growth, the more they think about technology needs with special emphasis on security.
Most small businesses offer benefits because “it is the right thing to do”
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Total 2-4 5-19 20-49 50-99
You and/or management feels it is the right thing to do 57% 60% 54% 46% 71%
As part of a total compensation package for employees 45% 46% 40% 58% 39%
To attract and retain talented employees 32% 29% 31% 29% 44%
To be competitive with other businesses in your sector 26% 18% 26% 38% 29%
Because of the Affordable Care Act (ACA) 25% 24% 30% 21% 22%
Other 2% 6% - - -
Why Offer Health Insurance?
2-5 5-19 0-49 50-99
50%64%
86% 89%
Offer Health Insurance to Employees
Most small businesses are satisfied with their ability to manage the organization’s health insurance needs.
Smaller businesses are buying employee health insurance through insurance brokers or agents
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Total 2-4 5-19 20-49 50-99
Through a licensed broker, agent, or advisor 40% 49% 44% 33% 27%
Directly from an insurance company (by phone with a customer service rep) 33% 25% 30% 40% 46%
Directly from an insurance company (through the company website) 23% 13% 21% 31% 34%
By reimbursing employees that purchase health insurance on their own 14% 13% 12% 10% 27%
Through a SHOP Exchange or Marketplace (Small business Health Options Program) 14% 11% 20% 21% -
Health Insurance Purchase Channels
Whereas larger companies are buying directly from the insurance company
Many insights that we found can be applied across the board
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Technology
#1 technology initiative businesses deal with is
keeping up with hardware & software upgrades and need help deciding the next steps
Universal Insight:Whether they are looking for a new Healthcare plan or shopping for productivity solutions, small businesses are looking for an expert “guide” to help them understand options and make the
right decisions.
Healthcare
Small businesses with 2-19 employees are more
likely to purchase through a broker vs. direct
What aresmall businesses thinking about
Finance?
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Most small businesses are satisfied with their ability managing the organization’s financial needs.
Very Somewhat Not satisfied
43%35%
21%
Satisfaction with Company’s Ability to Manage Financial Needs
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Top business financial concerns vary by business size
2-4 5-19 20-49 50-99
Concerns about Financial Issues
Employees
Dealing with business filing requirements
Meeting financial reporting requirements
Collecting your accounts receivable
Finding the right retirement benefits offerings for employees
Deciding whether to offer retirement savings benefits to employees
Getting access to lines of credit Encouraging/Helping employees take
advantage of the retirement benefits package
• Small companies are most concerned with filing and reporting requirements, and accounts receivable.
• Larger businesses are as concerned with filing and reporting requirements as they are with decisions about employee benefits.
Employee retirement plans are the #1 savings plan offered to employees
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Total 2-4 5-19 20-49 50-99
Employee retirement plan (e.g. 401K, 403b, SEP IRA) 34% 23% 33% 58% 47%
Employee life & disability insurance 27% 15% 24% 46% 51%
Healthcare Savings Account 21% 12% 21% 39% 33%
None/Do not offer a savings plan 44% 64% 46% 12% 13%
Other 1% 1% 1% - -
Financial Services Offered by Small Companies
Larger companies offer a broader selection of savings plans to employees, however, smaller companies are less likely to offer savings plans.
Looking at changes now Less than 1 year ago 1-2 years ago 3-5 years ago More than 5 years ago Never
12%10%
15%
6%
14%
43%
14%11%
17%
9%11%
39%
12%
25%26%
14%12%
11%
22%
16%
22%
13% 13% 13%
2-4 5-19 20-49 50-99
Almost half of small businesses with 19 or fewer employees have never made a change
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• About one-fourth of small businesses we spoke to have made changes to their savings plans in the last year
• Larger businesses (20+ employees) are more likely to make changes than businesses with fewer than 20 employees
Changes to Employee Savings Plans
0%
10%
20%
30%
40%
50%
60%
70%65% 65%
58% 58% 58% 58%54%
42% 42%
31%
37%39%
43%
35%
22%20%
18% 18%20% 20%
18%
44%
40%
36%
27%
22%
44%
24%
Rapid Slow No change Contraction
Leve
l of C
once
rnRapidly growing companies are more concerned with a host of financial issues
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Concerns with Financial Issues
Credit cards are the #1 credit stream available to small businesses
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Total 2-4 5-19 20-49 50-99
Access to lines of credit (net) 81% 75% 83% 88% 91%
Business credit cards 62% 59% 60% 70% 62%
A credit line(or revolving line of credit) 39% 28% 40% 49% 60%
A fixed loan 16% 11% 16% 26% 24%
Other 5% 5% 9% - 2%
None of these 19% 25% 17% 12% 9%
Access to Credit
Companies with 20+ employees are almost just as likely to have access to other sources of credit, such as a credit line or a fixed loan.
Financial advisers, online research, and insurance brokers are the top channels consulted for financial advice
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Total 2-4 5-19 20-49 50-99
Consulted any source for financial advice (net) 87% 83% 88% 93% 87%
Financial adviser or accountant 44% 54% 43% 35% 24%
Research online 39% 35% 44% 37% 42%
Insurance broker or specialist 30% 25% 27% 37% 51%
Colleagues you meet at local networking events 17% 12% 15% 26% 24%
Lawyer 15% 9% 20% 16% 22%
Conferences or informational seminars 12% 7% 14% 16% 20%
Other 1% 2% 1% - -
None of these 13% 17% 12% 7% 13%
Financial Services Information Channels
Smaller businesses of 2-4 employees are far more likely to seek financial counsel from a financial adviser than other sources.
What aresmall businesses thinking about
Commercial Insurance?
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Most small businesses are satisfied with their ability managing the organization’s insurance needs.
Very Somewhat Not satisfied
43%36%
19%
Satisfaction with Company’s Ability to Manage Insurance Needs
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Worker’s comp is the most widely held insurance, followed by commercial property & liability insurance
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Total 2-4 5-19 20-49 50-99Worker’s compensation 53% 48% 58% 57% 54%
Commercial property & liability 48% 52% 46% 45% 46%
Professional liability insurance 40% 38% 45% 29% 46%
Employee life & disability insurance 35% 22% 31% 60% 56%
Commercial auto insurance 32% 28% 31% 45% 30%
Employment practices insurance 17% 7% 19% 28% 32%h
Directors and Officers insurance 13% 11% 8% 26% 20%
Errors & omissions insurance 12% 12% 14% 7% 14%
Key man life insurance 11% 7% 11% 21% 18%
CyberRisk insurance 6% 2% 6% 7% 14%
None of these 7% 11% 4% 3% 8%
Current Insurance
• Cyber security is a major concern, very few businesses are insuring themselves against a cyber breach.
• Larger businesses (20+ employees) are more likely to make changes than businesses with fewer than 20 employees
Two-thirds of companies have made changes to their insurance in the past two years or are looking into making changes
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Changes to Insurance Policies
Looking at changes now Less than 1 year ago 1-2 years ago 3-5 years ago More than 5 years ago Never
12%
21%
24%
16%
14%12%
13%
26%
29%
13%
11%
7%
19%
28%26%
16%
7%5%
16%14%
36%
16%
10%8%
2-4 5-19 20-49 50-99
Most companies are receiving their information from specialists or from online research
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14%
11%
12%
19%
20%
42%
43%Contacted or met with an insurance broker or specialist
Researched online
Talked about it with colleagues you met at local networking events
Contacted or met with a financial adviser or accountant
Conferences or informational seminars
Contacted or met with a lawyer
None of these
Information Channels
Very small companies are much more likely to purchase through a licensed broker, agent, or advisor
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Total 2-4 5-19 20-49 50-99
Through a licensed broker, agent, or advisor 49% 58% 47% 40% 36%
Directly from an insurance company (through the company website) 27% 16% 27% 41% 46%
Directly from an insurance company (by phone with a customer service rep) 29% 19% 31% 34% 44%
Not sure 7% 8% 7% 5% -
Other 2% 2% 2% - 2%
Insurance Purchase Channels
Companies with more than 20 employees are far more likely to purchase directly from an insurance company.
2-4 5-19 20-49 50-99
Too much 4% 10% 14% 16%
Right amount 62% 64% 74% 68%
Too little 21% 17% 10% 10%
Not sure 13% 9% 2% 6%
Smaller companies are more likely to be uncertain or feel they are under covered
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9%
65%
17%
9%
Too muchRight amountToo littleNot sure
Do business feel they have Sufficient coverage?
- Two-thirds feel that they have the right amount of insurance
- Those that feel they have “too much” coverage are larger companies
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We have learned a lot …And would love to get to know you to dig deeper and help apply our current and future learnings to your initiatives.
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We also want to get you involved
What would you like to know about your audience?- Let’s work together to craft a questionnaire
specific to your objectives and target market
- We’ll then use those findings to craft data-driven insights to aid all aspects of your strategic marketing efforts
We are offering our partners the opportunity to take part in the next phase of our tracking study
Thank you
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