Over the past few years, fewer small business owners are focused on growing their business, yet more of them are feeling successful about how their business is operating and say they are optimistic about the economy strengthening this year, according to The Hartford’s 2015 Small Business Success Study.

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According to the fifth annual study, only 33 percent of small business owners say their primary goal is to grow their business significantly, which means a large increase in sales, revenue and staff. This is down from 41 percent in 2012. Fifty-five percent of owners say they are looking to maintain their business at its current size, which has been largely consistent over the past few years.

Even though more than half of owners have a maintenance mindset, 73 percent feel successful about how their business is operating now, up from 69 percent in 2011. And, the number of small business owners who are optimistic that the national economy will improve this year has increased from 33 percent in 2012 to 52 percent in 2015.

“It is encouraging to see better overall sentiment among small business owners, however, the decline in owners focused on growth is something all of us need to pay attention to,” said The Hartford's CEO Christopher J. Swift. “There is no better place to be an entrepreneur than in the U.S., so it is imperative that we work to create an environment that better fosters small business formation, success and growth.”

Swift added, “At The Hartford, we are actively engaged in helping small businesses grow and succeed. Through our community partnership efforts, we provide education, resources and microloans to small businesses, as well as an employee-led program to patronize and support local businesses, which we call Hart Mobs.”

Risk Taking Remains Conservative
Despite their feelings of success and optimism, the majority of small business owners (72 percent) continue to say that the number of risks they take stayed the same over the past six months. Only about one-fifth of business owners (17 percent) say the risks they are taking have increased, similar to levels in previous years.

Most owners (79 percent) consider themselves conservative with their approach to risk taking, which is fairly consistent with the results from the past three years. Although small business owners continue to be conservative with their risk taking, there has been a steady decline in owners identifying macroeconomic factors as a risk to their business.

When showed a list of risks ranging from taxes to slow economic growth, small business owners uniformly felt that these represented less of a risk to their business compared to three years ago.

             
Major Risks to Their Business     2015     2012
Slow economic growth     48 percent     67 percent
Healthcare costs     39 percent     53 percent
Taxes     37 percent     59 percent

Uncertainty about federal
regulations

    31 percent     56 percent
       

Characteristics of Highly Successful Business Owners
Based on an analysis of data over the past few years, The Hartford’s study found that owners who take more risks and feel optimistic about the national economy tend to be more inclined to say their business is extremely or very successful. In addition, the highly successful business owners are not as conservative as those who feel slightly or not at all successful.

The analysis also found that owners who feel their business is operating highly successfully are relying on better qualified talent, better guidance from other professionals, and even bank loans, whereas owners who feel less successful seem to be taking on the load and stress of running a small business more on their own.

In the 2015 study, one-quarter (27 percent) of owners who feel extremely/very successful about how their business is operating right now rate their overall level of risk as “risky” rather than “conservative,” compared to just 14 percent of those who feel they are slightly/not at all successful.

Those who feel their business is operating less successfully and have not hired or not hired as much as they would have liked this past year are more likely to say this is because they are taking on additional responsibilities themselves compared to those who feel highly successful (38 percent vs. 21 percent).

Highly successful owners who have not hired/not hired as much as they would have liked in the past year are less likely to say the reason for not hiring is that their business is not growing, compared to those who feel less successful and have not hired (20 percent vs. 59 percent).

Upgrading Payment Technology – Chip Embedded Credit/Debit Cards
This year’s study asked small business owners about current issues that might impact their business. On the topic of upgrading their payment technology to chip embedded credit/debit cards, half (50 percent) of all small business owners are unaware of the Oct. 1 deadline when some credit card issuers may shift the liability for certain fraudulent charges to businesses that do not accept chip-embedded cards. Thirty-three percent of owners are aware of the change and 12 percent are not sure.

Eighty-six percent of small business owners surveyed said they do not currently accept chip embedded credit/debit cards, also known as EMV technology. For those who have not upgraded their systems, the challenges they face in adopting the new technology vary:

       
Challenges to Upgrading Payment Technology     2015
Customers haven’t asked     30 percent

Don’t know enough about this product to make a
decision

    21 percent
It is not mandatory yet     20 percent
Not clear on the benefits to your business     19 percent
New machine is too expensive or complex     18 percent
   

Among those small businesses that did take the leap forward to accept chip embedded credit/debit cards, the largest number of business owners (43 percent) did so because they felt it was the “future of payment.” Other reasons for adopting the technology include:

       
Reason for Adoption     2015

Wanted to avoid assuming liability for any fraudulent
charges

    24 percent

A payment technology company offered a good
price

    23 percent

It protects customers from financial information
being stolen or lost

    16 percent
Customers asked about it     15 percent
   

Small Business Owners Want It “My Way”
When asked which theme song would be their small business anthem, “My Way” by Frank Sinatra, representing someone who is determined and hardworking, came out on top with 35 percent. Twenty-one percent of owners chose “Don’t Stop Believing” by Journey because they are hopeful and optimistic about achieving their goals.

The top three small business anthems selected were:

       

Which Song Would Be Your Small
Business Anthem?

     2015

“My Way” by Frank Sinatra, because I am
determined and hard-working

    35 percent

“Don’t Stop Believing” by Journey,
because I am hopeful and optimistic of
achieving my goals

    21 percent

“We are the Champions” by Queen,
because I have persevered and been
successful

    14 percent
   

Although “My Way” came out on top for all small business owners, those who feel extremely or very successful are more likely to be singing ‘We are the Champions” by Queen as their business anthem (21 percent) compared to owners who feel slightly or not at all successful (9 percent).

SBSS Methodology
Braun Research conducted a telephone survey among small business owners across the United States on behalf of The Hartford. A total of 2,003 interviews were completed with small business owners of for-profit businesses with fewer than 100 full-time employees who have been in business for at least one year. The study included a nationally representative sample of businesses in the United States. One owner, co-owner, principle owner or sole owner per business was interviewed. The interviews were conducted between July 7-16, 2015. The margin of error is ± 2.1 percentage points at the 95 percent confidence level.

For more information on these survey results, visit www.thehartford.com/successstudy.

For more news about The Hartford, visit: http://newsroom.thehartford.com/.

About The Hartford
With more than 200 years of expertise, The Hartford (NYSE:HIG) is a leader in property and casualty insurance, group benefits and mutual funds. The company is widely recognized for its service excellence, sustainability practices, trust and integrity. More information on the company and its financial performance is available at www.thehartford.com. Join us on Facebook at www.facebook.com/TheHartford. Follow us on Twitter at www.twitter.com/TheHartford.

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