Benefits Packages Appeal to Small-Business Owners

However, the Paychex poll found only 29% and 17% of all small-business owners offer health insurance and 401(k) benefits, respectively. Among companies with five to 50 employees, 57% offer health insurance, with 13% planning to do so soon, while 39% offered 401(k) plans.

“While concerns about cost likely serve as a barrier to offering benefits for small business owners, the costs may not necessarily be as burdensome as owners might think,” said Martin Mucci, Paychex president and CEO.

Half of small-business respondents expressed optimism about their prospects for growth in 2011, while 47% report that recent government regulations have slowed or prevented growth. Tax changes (56%), health-care reform (39%), and state regulations in response to budgetary challenges (25%) were cited as the top three regulatory issues most impacting small businesses. The research found that 61% of respondents have seen more government regulation over the past five years. 

In addition to gauging their perspectives on government regulations, respondents were asked to identify the business issue that “keeps you up at night.” Uncertainty about the economy and consumer confidence, the need to add customers and revenue, and concerns over cash flow were among the most-cited responses.

“After several extremely difficult years for small businesses, 2011 is shaping up as a year when indicators of progress and growth appear to be moving in the right direction for many categories of small business,” said Mucci. “While regulation clearly weighs heavily on the minds of small-business owners, optimism for growth and plans for adding employees bode well for small businesses in particular and the U.S. economy in general.”

The survey shows significant differences in opinions and outlooks among small-business owners with fewer than five employees and those with five to 50 employees. For example, owners of companies with five to 50 employees were 14% more optimistic about their prospects for growth than their counterparts at smaller businesses. While 22% of all small businesses surveyed plan to hire in 2011, the number rises to 46% for companies with more than five employees.

Research was conducted online by Eric Mower and Associates, an integrated marketing communications and research agency, on behalf of Paychex, among 565 small-business owners (50 or fewer employees) within the United States between February 16 and March 1, 2011.