Small Business Owners: Insurance Costs and Taxes Top 2007 Concerns

Small business owners who set 2007 goals and objectives for their businesses indicate that the cost of insurance (64 percent) and taxes (62 percent) top their list of concerns for the new year. These findings come from the Wells Fargo/Gallup Small Business Index, a survey of business owners nationwide conducted by The Gallup Organization and sponsored by Wells Fargo, America's number one lender to small businesses. Rounding out the top five concerns for 2007 are energy prices (54 percent), government regulations (45 percent), and finding qualified employees (42 percent).

"Small businesses must actively manage costs in order to remain competitive," said Rebecca Macieira-Kaufmann, executive vice president and head of Wells Fargo's small business segment. "For years, business owners have identified the rising cost of health insurance as a key area of concern. Small business owners know providing employee health insurance helps attract and retain qualified employees, yet they continue to be challenged by the high cost of insurance."

Nine in ten small business owners who developed a business plan for 2007 say generating stronger revenues is their top priority for the year ahead. Nearly two in three (63 percent) also say cutting operating expenses is a major objective for 2007. Reaching more customers is cited by 57 percent as a high priority, followed by more advertising (42 percent) and investment in technology (37 percent).

"Small businesses need to constantly innovate and re-evaluate their business models in order to be successful," said Joseph Talmadge, owner of San Francisco-based delivery services company, SpecialT Delivery. "While I'm optimistic that 2007 will be a good year, I also recognize that my company must continuously monitor and hold operating costs to achieve our desired growth and remain successful for the new year."

Sixty-six percent of respondents report setting clear goals and objectives for their businesses each year. Of those who prepare an annual plan, 32 percent say they develop a formal plan. Interestingly, those who have owned their businesses for fewer than five years are more likely to establish clear goals or objectives for the coming year than those who have owned their businesses longer (78 percent versus 63 percent). Among those who set yearly goals and objectives, about seven in ten report meeting or exceeding their goals.

About the Small Business Index

Since the third quarter of 2003, the quarterly Wells Fargo/Gallup Small Business Index has surveyed small business owners on their perceptions of current conditions and future expectations relating to financial situation, revenues, cash flow, capital spending, number of jobs and credit availability. An Index score of zero reflects that an equal number of small business owners are optimistic and pessimistic about their companies' situation. Results are based on telephone interviews with approximately 600 small business owners nationwide conducted November 9, 2006 through November 29, 2006. The margin of sampling error is + 4 percentage points.

About Wells Fargo

Wells Fargo & Company is a diversified financial services company with $482 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,000 stores and the internet (wellsfargo.com) across North America and internationally. Wells Fargo Bank, N.A. has the highest possible credit rating, "Aaa," from Moody's Investors Service and the highest credit rating given to a U.S. bank, "AA+," from Standard & Poor's Ratings Services.

Providing financial products and services to more than one million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada, Wells Fargo is the #1 lender to small businesses in the United States in total dollar volume according to the most recent CRA data (2005).

The second largest national SBA lender in dollars, Wells Fargo is an SBA Preferred Lender in 28 states and the District of Columbia, and originated 4,937 loans for $578 million in 2006. Its diverse business services programs provide financial services outreach and education to women, African American, Latino, and Asian business owners. Since 1995, Wells Fargo has loaned more than $33 billion to women and diverse business owners. For more information, please visit http://www.wellsfargo.com/biz.

About the Gallup Organization

For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people's attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup's current activities consist largely of providing marketing and management research, advisory services and education to the world's largest corporations and institutions.

Website: http://www.wellsfargo.com/

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