Facts & Resources

San Francisco Is Open for Business: Bank of America Survey Finds That Hiring Among Bay Area Entrepreneurs Is on the Rise

Despite Lingering Economic Concerns, Local Entrepreneurs Plan for a Robust 2016

Tuesday, November 17, 2015 12:00 pm EST



Public Company Information:

"They are continuing to evolve their businesses and are an exemplary market when it comes to collaborative workplace cultures."

Small business owners in the Bay Area are overwhelmingly optimistic, according to the fall 2015 Bank of America Small Business Owner Report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in San Francisco and around the country.

Sixty-four percent of Bay Area small businesses plan to hire in the coming year, an increase from 42 percent a year ago. Additionally, 77 percent of area businesses plan to grow their business over the next five years, a 16 percentage point spike from last year, and 71 percent are confident their revenue will increase in the coming year, a 17 percentage point jump from a year ago.

“Bay Area small business owners are growing in innovative ways,” said Emily Shanks, West Coast small business regional executive at Bank of America. “They are continuing to evolve their businesses and are an exemplary market when it comes to collaborative workplace cultures.”

Not surprisingly, this expected growth demands more capital. More than one-third (37 percent) of San Francisco small business owners plan to apply for a loan in 2016, a significant increase from 10 percent one year ago. When asked about how they would use this capital, 62 percent of business owners said they will use it to invest in new equipment (compared to 52 percent in fall 2014), and 62 percent will invest in employee training and development – an impressive 40 percentage point jump since fall 2014. As a tech startup hub, Bay Area small business owners are more likely to obtain this funding through alternative lending sources (35 percent), compared to 32 percent nationally.

Economic confidence on the rise, despite lingering concerns
In addition to confidence in their businesses, Bay Area small business owners have increased confidence in the economy: Two-thirds (66 percent) believe the local economy will improve in the next year, an increase of 10 percentage points from a year ago and the highest since the inception of the survey in 2012. Fifty-seven percent also predict the national economy will improve (versus 46 percent a year ago and 36 percent three years ago). Skepticism remains higher on the performance of the global economy with 43 percent saying it will improve.

When asked about their top concerns, San Francisco small business owners believe the following factors have the potential to impact their business over the next 12 months:

  • The possibility of future interest rate hikes (43 percent).
  • The upcoming U.S. presidential election (43 percent).
  • The possibility of a rising minimum wage (43 percent).
  • Financial crises in countries abroad [i.e., China and Greece] (41 percent).

Bay Area small business owners embrace workplace 2.0
The workplace culture among San Francisco small businesses is collaborative, tech-friendly and flexible. Most small business owners (91 percent) say that changing technology has helped their business. In addition, 86 percent of San Francisco small business owners say they are willing to adopt new technologies, with many having incorporated new technologies into their business practices over the past five years, including website optimization (50 percent) and new payment systems (48 percent).

Collaboration is key, with half (50 percent) saying their workplace has become more focused on teamwork in recent years, the highest of all nine markets surveyed. This collaboration is happening even as employers are offering employees more flexibility: 54 percent of Bay Area small business owners give their employees the option to telecommute – a benefit that more than half (59 percent) say improves employee attitudes at work.

Even though 43 percent of small business owners say that technology has reduced their need for employees, hiring remains strong, indicating the nature of the work is changing and they may be hiring employees that more directly contribute to business growth.

Small business owners are beginning to offer nontraditional perks as well, including areas to relax and unwind, such as nap pods or game rooms (22 percent), office happy hours (22 percent) or the ability to bring pets to work (15 percent).

Sharing economy, cybersecurity raise concerns
Small business owners in San Francisco are split on the sharing economy, an industry in which businesses organize and profit from the sharing rather than owning of goods and services – from bikes to Wi-Fi. One-quarter (25 percent) say it’s a benefit, while the same number say it’s a threat; this is higher than any other market surveyed.

San Francisco small business owners are more likely than their national counterparts to have been a victim of a cybersecurity breach (20 percent, versus 12 percent nationally). Despite 67 percent upgrading their technology once a year or more, local business owners are also less likely to say they feel prepared for such a breach (56 percent, versus 66 percent nationally).

San Francisco entrepreneurs looking forward to a successful year-end
Bay Area small business owners expect to end the year on a high note: 82 percent say it is likely they will hit their year-end revenue goal. Additionally, many small business owners intend to offer year-end perks to their employees including salary bonuses (53 percent), flexible hours or vacation time (51 percent) or a holiday party (45 percent).

When it comes to holiday milestones, the majority of local business owners continue to state that Black Friday and Cyber Monday have no impact on their business’ bottom line, but they are becoming stronger revenue drivers for some. Forty-five percent of San Francisco small business owners say Black Friday has an impact on their business’ bottom line – an 18 percentage point jump from one year ago. Similarly, 43 percent of small business owners reported that Cyber Monday has an impact on their businesses’ bottom line, compared to 17 percent in fall 2014.

For an in-depth look at the attributes of the nation’s small business owners, read the full fall 2015 Bank of America Small Business Owner Report, and for additional insights from small business owners in San Francisco and across the country, download the Small Business Owner Report local insights infographic here.

About the Bank of America Small Business Owner Report
Braun Research, Inc. conducted the Bank of America Small Business Owner Report survey by phone from August 21 through September 22, 2015, on behalf of Bank of America. Braun contacted a nationally representative sample of 1,001 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between 2 and 99 employees. In addition, 300 small business owners were surveyed in each of nine target markets: Los Angeles, Dallas, Washington, D.C., New York, Boston, Chicago, San Francisco, Atlanta and Miami. The margin of error for the national sample is +/- 3.1 percent; the margin of error for the oversampled markets is +/- 5.7 percent, reported at a 95 percent confidence level.

The Braun Research survey results conducted on behalf and for the exclusive use of Bank of America and interpretations in this release are not intended, nor implied, to be a substitute for the professional advice received from a qualified accountant, attorney or financial advisor. Always seek the advice of an accountant, attorney or financial advisor with any questions you may have regarding the decisions you undertake as a result of reviewing the information contained herein. Nothing in this report should be construed as either advice or legal opinion.

Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 47 million consumer and small business relationships with approximately 4,700 retail financial centers, approximately 16,100 ATMs, and award-winning online banking with 32 million active users and more than 18 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

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Reporters May Contact:
Colleen Haggerty, Bank of America, 1.213.621.7414