#1 Election Issue for Small Business Owners? New Wells Fargo/Gallup Survey Says It's Healthcare Costs by a Wide Margin SAN FRANCISCO, Oct. 26 /PRNewswire-FirstCall/ -- More than eight of every ten small business owners -- in a recent Wells Fargo/Gallup Survey -- say they believe healthcare costs are hurting the business climate. According to the survey, 85% said healthcare costs were hurting the business climate (68% responded they were "hurting a lot"). "Optimism remains steady, but these latest findings show how much election issues are weighing on the minds of U.S. small business owners," said Rebecca Macieira-Kaufmann, small business segment manager for Wells Fargo. "Small business owners are personally concerned about issues like terrorism and the situation in Iraq, but when it comes to their businesses, they are most concerned about healthcare costs and outsourcing -- issues that directly impact their ability to build and grow their businesses. This illustrates the sophistication and drive of U.S. small business owners, who remain focused regardless of the obstacles placed in front of them." Seventy-eight percent of business owners surveyed said they believe the election will have an impact on the business climate in the country. Respondents also cited the price of energy (88%) and the outsourcing of jobs to foreign countries (66%) as the next most pressing issues. Other issues cited include the quality of U.S. elementary and secondary education (59%), the war in Iraq (57%), the federal budget deficit (56%), the war on terrorism (51%), uncertainty over the outcome of the presidential election (50%), general economic conditions in the country (48%), inflation (45%), and interest rates (13%). "As a small business owner, I share the same election concerns as the general voting public. But I'm also very focused on the issues that impact my ability to run a business," said Cynthia Cohen, founder and president of Strategic Mindshare, a Miami and Silicon Valley-based strategic consulting firm. "In a sense -- small business owner concerns are two-fold: those that affect the business climate and how we operate, and those that impact our lives and the lives of our families." The Index, which measures business confidence and overall market conditions as seen by small business owners, stayed virtually the same despite significant regional variations. The Midwest score stayed at 78, significantly lower than the other regions. The West had the largest increase (up to 110 from 92), the South had the largest decline (down to 101 from 128), and the East score rose slightly (from 104 to 109). Scores also varied among business types. The Index score for the Goods Sector, dropped to 52 from last quarter's previous high of 117. This could indicate a possible correlation between the lower score and small business owners concern about outsourcing. The score for the Service Sector jumped from 99 to 115 over the last quarter, while the Trade Sector score also rose from 86 to 97. Additionally, there was a significant change in Index scores for small businesses of differing sizes. Businesses with $50K-$250K in annual revenues scored an 82 on the most recent Index (down from 99), significantly lower than the Index score of 131 for businesses $250K - $20M in annual revenues (up from 102). The previous quarter, both the smaller and larger small businesses reflected the same levels of optimism. According to the Q3 2004 Index, which covers July - September, 2004, 55% of small business owners surveyed (55%) are more enthusiastic about the election this year than in past years. Also, 60% say the current level of interest rates is helping, rather than hurting, the business climate. The Index tracks six key measures for both current conditions and future expectations as reported by small business owners: current financial situation, revenues, cash flow, capital spending, number of jobs, and credit availability. About Wells Fargo Wells Fargo & Company is a diversified financial services company with $422 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 elsewhere internationally. Wells Fargo Bank, N.A. is the only "Aaa"- rated bank in the United States. 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 2002 CRA data. The second largest national SBA lender in dollars, Wells Fargo is an SBA Preferred Lender in 28 states, and originated 3,555 loans for $495 million in 2004. Wells Fargo has also been ranked the number one SBA 504 lender nationally for the last two years. Speer & Associates rated Wells Fargo's online services #1 for small business and for consumers (2003). Its targeted business services programs provide outreach and education to women, African American, Latino, and Asian business owners about financial services. Since 1995, Wells Fargo has loaned more than $22 billion to women and minority business owners. 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. DATASOURCE: Wells Fargo & Company CONTACT: Matt Hurwitz of Wells Fargo & Company, +1-415-222-1679, or Web site: http://www.wellsfargo.com/

Copyright