Small Business Tracking Study - Insurance & Finance

1. Small Business Tracking Study
Wave 1: May 2015

2. It’s our business to know your business
2
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. 3 Source: Constant Contact survey 2014

4. Small businesses will continue to face challenges
every day…
4
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?

5. Coffee Shop
5
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?

6. We have begun our first conversations and created a baseline
6
505 small business decision-makers reached through an online survey
40%
21%
13%
13%
11%
Number of
Employees
2 to 4
5 to 9
10 to 19
20 to 49
50 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 Business
23% 1 to 5 years
22% 6 to 10 years
20% 11 to 19 years
35% 20+ years
14%
Construction-based

7. Overall, small business owners believe their businesses
are growing and are optimistic for the future
7
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%

8. We asked small business owners about different
aspects of running their businesses
8
Finance TechnologyInsurance Healthcare

9. Interesting insights and takeaways from other areas
9
Finance TechnologyInsurance Healthcare

10. 10
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.

11. Most small businesses offer benefits because
“it is the right thing to do”
11
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?
50%
64%
86% 89%
2-5 5-19 0-49 50-99
Offer Health Insurance to Employees
Most small businesses are satisfied with their ability to manage the organization’s health
insurance needs.

12. Smaller businesses are buying employee health
insurance through insurance brokers or agents
12
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

13. Many insights that we found can be applied across the board
13
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

14. What are
small businesses
thinking about
Finance?
14

15. Most small businesses are satisfied with their ability managing
the organization’s financial needs.
43%
35%
21%
Very Somewhat Not satisfied
Satisfaction with Company’s Ability to Manage
Financial Needs
15

16. Top business financial concerns vary by business size
16
2-4 5-19 20-49 50-99
Employees
Concerns about Financial Issues
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.

17. Employee retirement plans are the #1 savings plan offered to employees
17
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.

18. 12%
10%
15%
6%
14%
43%
14%
11%
17%
9%
11%
39%
12%
25%
26%
14%
12%
11%
22%
16%
22%
13% 13% 13%
Looking at changes now Less than 1 year ago 1-2 years ago 3-5 years ago More than 5 years ago Never
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

19. 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%
0%
10%
20%
30%
40%
50%
60%
70%
Dealing with business filing
requirements
Collecting your accounts receivable Getting access to lines of credit Deciding whether to offer retirement
savings benefits to employees
Finding the right retirement benefits
offerings for employees
Meeting financial reporting
requirements
Helping employees take advantage of
the retirement benefits package
LevelofConcern
Rapid Slow No change Contraction
Rapidly growing companies are more concerned with a host
of financial issues
19
Concerns with Financial Issues

20. Credit cards are the #1 credit stream available to small businesses
20
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.

21. Financial advisers, online research, and insurance brokers are
the top channels consulted for financial advice
21
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.

22. What are
small businesses
thinking about
Commercial
Insurance?
22

23. Most small businesses are satisfied with their ability managing
the organization’s insurance needs.
43%
36%
19%
Very Somewhat Not satisfied
Satisfaction with Company’s Ability to Manage
Insurance Needs
23

24. Worker’s comp is the most widely held insurance, followed by
commercial property & liability insurance
24
Total 2-4 5-19 20-49 50-99
Worker’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

25. Two-thirds of companies have made changes to their insurance in
the past two years or are looking into making changes
25
Changes to Insurance Policies
12%
21%
24%
16%
14%
12%
13%
26%
29%
13%
11%
7%
19%
28%
26%
16%
7%
5%
16%
14%
36%
16%
10%
8%
Looking at changes now Less than 1 year ago 1-2 years ago 3-5 years ago More than 5 years ago Never
2-4 5-19 20-49 50-99

26. Most companies are receiving their information from specialists
or from online research
26
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

27. Very small companies are much more likely to purchase
through a licensed broker, agent, or advisor
27
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.

28. 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
28
9%
65%
17%
9%
Too much
Right amount
Too little
Not 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

29. 29
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.

30. We also want to get you involved
30
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

31. Thank you
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