DES MOINES, Iowa--(BUSINESS WIRE)-- New research shows American business owners focus on the present with no long-term plan to exit or transition their business. The Principal Financial Group^® surveyed business owners about their priorities during the current economic recession.

The study, which surveys small to medium sized business owners with 2-500 employees, is released by the Principal Financial Group and conducted by Harris Interactive^®.

Among those surveyed, nearly seven out of 10 owners (66%) report they do not have an exit plan to transition their business in the event of death, disability or retirement. Instead, owners focus on growing their business (70%) followed by achieving business stability and remaining active in the business after retirement (both 47%).

Recent market events have forced most people to reassess financial priorities, but the task looms larger for business owners who must take stock of their personal and business needs, said Steve Parrish, national advanced solutions consultant for the Principal Financial Group. Many owners said their retirement plan is to never retire, while others plan to fund retirement by selling their business. By not developing a plan to exit their business, they leave it vulnerable to be sold for less than it's worth, creating a negative financial impact for themselves and their family.


Desires vs. Reality

The findings also indicate business owners' stated priorities often do not match their actions.

• Health insurance was the top priority for business owners, yet more than half of owners (58%) do not currently offer this benefit.
• Business protection followed in importance, but according to the survey, six out of 10 (61%) do not have plans in place to help them protect their business in the case of death, disability or termination of key employees.
• Retirement plans came in at number three, yet only about one in five (19%) offer a 401(k) plan to employees.

Our research clearly demonstrates owners are torn between their desires and their current reality, notes Parrish. The economic environment highlights the importance of preparing for the unexpected. While it's understandable individuals will focus on the short term now, they need to make time to plan for their future so they can protect their business and meet their financial goals.

An in-depth analysis of the research is available upon request by emailing sorrel.sonja@principal.com.

Methodology

The survey was conducted by Harris Interactive with 423 completed interviews from December 10, 2008 through January 8, 2009. Interviews were conducted online using Harris Interactive Small Business Panel, a sample base consisting of a variety of industries, company sizes, titles, and revenue data. With more than 99% of all employer firms in the United States defined as small business, this panel is an efficient, cost-effective way of reaching out to this important audience.

About the Principal Financial Group

The Principal Financial Group^® (The Principal ^®)¹ is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $236.6 billion in assets under management² and serves some 18.8 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.


About Harris Interactive

Harris Interactive is a global leader in custom market research. With a long and rich history in multimodal research that is powered by our science and technology, we assist clients in achieving business results. Harris Interactive serves clients globally through our North American, European and Asian offices and a network of independent market research firms. For more information, please visit www.harrisinteractive.com.

¹ The Principal Financial Group and The Principal are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

² As of March 31, 2009



The Principal Financial Group

Sonja Sorrel, 515-362-2431

Sorrel.Sonja@principal.com

Source: Principal Financial Group