VerticalResponse, Inc. surveys 831 small businesses across America; finds support for public healthcare offering mixed

After the vote to overhaul health care was passed by the full House of Representatives, 25.2% surveyed would not cancel employer-provided coverage if given public healthcare offering

SAN FRANCISCO, November 12, 2009 — VerticalResponse, Inc., a leading provider of self-service email marketing, online surveys and direct mail solutions for small businesses, today releases the results of a survey of 831 small businesses of under 500 employees, which showed that over a quarter of respondents would not cancel their employer-provided coverage if given a public healthcare offering. In the wake of this weekend’s successful vote to overhaul health care by the full House of Representatives, the survey provides a pulse check on how small businesses feel about a public offering of healthcare, their hiring practices, and whether they will apply for funding in 2010.

The survey results highlight the disparity between healthcare conditions for small businesses of different sizes, with marked differences between companies of 1 to 10 and 11 to 100 employees. When asked whether or not small businesses offered healthcare to their employees an overwhelming 72 percent of small businesses with 1-10 employees do not offer healthcare to their employees. This compares with 24 percent of businesses with staff of 11-100 who do not offer healthcare. However, amongst those businesses with 11-100 staff who do offer healthcare, 41 percent wouldn’t cancel their employer-provided coverage if there was a public offering. One small business survey respondent in support of the proposed healthcare reform was The San Francisco Art Exchange.

"A public offering of healthcare unburdens small businesses and entrepreneurs alike, as it allows them to focus on core parts of their business such as innovations and new products," said Theron Kabrich, CEO, San Francisco Art Exchange. "It also removes an unfair competitive advantage for small businesses when trying to attract the best employees, and levels the playing field."

The survey findings are released just after the American unemployment rate rose to 10.2 percent, the highest rate since April 1983. Although the small business sector continues to be a pivotal part of the economy—creating 65 percent of all new jobs in America over the past 15 years—most of the survey respondents have halted hiring in the past year. In the 11-100 employee businesses, there are approximately 2.5 times more respondents—or 33.3 percent—that are still hiring versus the 13.2% of companies in the 1-10 employee size.
Among key findings, VerticalResponse reports*:

Healthcare: Most small businesses with fewer employees don’t offer healthcare as of today, and most wouldn’t cancel their current coverage for their employees.

  • 40.9% of businesses with 11-100 employees wouldn’t cancel their employer-provided coverage if there was a public offering and the largest portion of businesses with 1-10 employees also wouldn’t.
  • Of all small businesses an average of 16% of businesses would cancel their employer-provided coverage if there was a public offering.
  • 71.8% of businesses with 1-10 employees do not offer healthcare to employees—versus the 69.4% of businesses with 11-100 employees who do offer healthcare to employees.

Hiring: For the most part small businesses realize they need to hire to continue growth in the near future, however most of the businesses seem to have halted hiring in the past year.

  • In the 11-100 employee businesses, there are approximately 2.5 times more respondents—or 33.3 percent—that are still hiring versus the 13.2% of companies in the 1-10 employee size.
  • Smaller businesses report they will take longer to recover from the current economic downturn. In the next three months, only 11 percent of businesses with 1-10 employees are planning on new hires—versus 27.1% of businesses in the 11-100 staff range who are planning to expand.
  • Over half (52.5%) of all respondents said the number of employees in their company had stayed the same over the past year.
  • More than double the larger business size reported an increase in their employee number—or 34.3 percent—versus just 16.9% of businesses with 1-10 staff reporting an increase.

Funding for small businesses: Funding of all types continues to be a challenge for small businesses in the recent past.  In the future many will try to apply for funding.

  • Close to one fifth of respondents applied for funding in the past year, and were unsuccessful.
  • 62.6% of all small business respondents did not try for funding in the past year.  
  • When considering funding for 2010, 33% of small business respondents plan to apply for funding.

"As VerticalResponse is both a small business, and a staunch supporter of the small business community, we were excited to see where our customers stood on government policies and healthcare reforms," said VerticalResponse CEO and founder Janine Popick. "The large difference in opinions between small businesses of one to ten employees versus those with 11 to 100 employees highlights that the current government must consider the diversity of the small business community—and it’s paramount they canvass opinions of small business owners from various industries and company sizes as there’s no one solution for all."

The survey responses truly represent the heart of the small business community, with over three-quarters of respondents having between 1 and 10 employees—this group was 76.5% or 632 of the total 831 respondents. This category includes a number of sole proprietor businesses, indicating that entrepreneurs continue to flourish despite the economic climate. The remainder of the respondents included 19 percent who have between 11-100 employees. VerticalResponse used its own survey tool, launched in April 2008, to deliver multiple choice and free-form answers to a subset of its users, and the small business community.

Methodology

Surveys were taken over a six-week period starting September 22, finishing on October 29. They were entered in anonymously by VerticalResponse customers, and also filled in at the Small Business Development Center "Online Marketing Boot Camps" across California. The questions were focused on hot topics such as proposed healthcare reforms, current and future marketing spend for channels such as social media and email marketing, and attempts to gain funding. The survey included a number of freeform options, which are included in the individual summary reports.

In addition, the results have been split out into overall respondents; and include a comparison of the differences between small businesses with 1-10 employees, versus those with 11-100 employees. Further vertical breakdowns include the retail segment, which comprises 19 percent of respondents—and non-profits, which make up 11.2 percent of respondents.

*For complete survey results, contact jlarge@verticalresponse.com or call 415.808.2457.

To find out more, please visit: www.verticalresponse.com.

About VerticalResponse

VerticalResponse, Inc. is a leading provider of self-service email marketing, online surveys and direct mail services empowering small businesses to easily create, manage and analyze their own direct marketing campaigns. VerticalResponse’s flagship product is the Small Business Stimulus Package, which bundles email, online surveys and postcards to offer customers an integrated Web-based direct marketing solution that’s intuitive and affordable. VerticalResponse is headquartered in San Francisco, California. For additional information, please visit www.verticalresponse.com


Obama remarks on small businesses and health insurance reform [Transcript Courtesy of the White House], Thursday, October 29, 2009 http://www.washingtonpost.com/wp-dyn/content/article/2009/10/30/AR2009103002838.html

Employment Situation Summary, the Labor Department October Job report, November 6, 2009 http://www.bls.gov/news.release/empsit.nr0.htm

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