Bank of America Survey Finds 63 Percent of San Francisco Small Business Owners Are Still Recovering From the Great Recession
Despite Challenges, Local Entrepreneurs Are Significantly More Likely to Grow Their Businesses Than They Were One Year Ago
Seven years after the Great Recession, nearly two-thirds of Bay Area small business owners (63 percent) report their businesses are still recovering, according to the spring 2015 Bank of America Small Business Owner Report, a semi-annual study exploring the concerns, aspirations and perspectives of small business owners in the Bay Area and around the country. Though many feel they have not completely recovered, they are more optimistic about the economy, business growth, revenue expectations and hiring plans than they were a year ago, when comparing to findings in the spring 2014 report.
“The spirit of San Francisco shines through as small business owners maintain their optimism and confidence,” said Emily Shanks, small business banking Northwest regional executive for Bank of America. “Throughout the recovery, Bay Area entrepreneurs have maintained an impressive commitment to their employees and customers, and Bank of America is proud to support their continued success.”
Small business owners in the San Francisco area are far more confident in the economy than they were a year ago. Fifty-nine percent believe the local economy will improve over the next 12 months, compared to 49 percent in spring 2014. Bay Area respondents are also more confident about growth in the national economy (55 percent versus 48 percent), and the global economy (40 percent versus 35 percent).
San Francisco entrepreneurs are also feeling positive about the future of their businesses. Sixty-two percent plan to grow their business over the next five years, up 12 percent from last spring. In addition, more than half (54 percent) expect an increase in revenue over the next 12 months, compared to 49 percent last year.
When looking at staffing, 40 percent of San Francisco small business owners plan to hire more employees over the next year, which is consistent with last year’s findings (38 percent). Despite these hiring projections, nearly half of Bay Area small business owners (46 percent) say it’s difficult to find qualified candidates. Bay Area entrepreneurs say the top challenges in finding qualified staff are attributed to a skills gap (60 percent) and high salary demands (42 percent).
San Francisco small business owners demonstrate self-sacrifice;
prioritize employees and customers
Bay Area small business owners are prioritizing the needs of customers and employees before their own. The survey reveals that 68 percent of local entrepreneurs would rather delay or reduce their own compensation than take other courses of action to make ends meet; this includes delaying or reducing compensation for their staff (7 percent) or scaling back on the services they offer customers (9 percent). Almost half (49 percent) report that they have never given themselves a raise, or haven’t done so in more than two years.
Almost all (96 percent) San Francisco small business owners say they have employee appreciation programs, including:
- Dinners and outings (46 percent).
- Spot bonuses (40 percent).
- Office recognition (40 percent).
They also provide a number of benefits for employees, including:
- Flexible hours (62 percent).
- Salary bonuses (45 percent).
- Office closure on major holidays (43 percent).
The majority (54 percent) of Bay Area small business owners cite that establishing relationships with customers and clients is the primary driver of repeat business, and they find many ways to show their appreciation, including:
- Free products or services for their first visit (34 percent).
- Monetary rewards, such as discounts or free upgrades (33 percent).
- Personalized gifts (31 percent).
Additionally, 64 percent say a primary way they have adapted to customer demands is by becoming more technologically savvy (62 percent nationally), while 52 percent have expanded product and service offerings that cater to a younger client base (41 percent nationally).
Bay Area small business owners feel appreciated by their local
community, but less so by policymakers
Bay Area small business owners overwhelmingly support other small businesses in the community by shopping small. Sixty-five percent of Bay Area small business owners gave themselves an “A” or “B” grade for shopping at other local small businesses. They also rate their local community high in shopping small, as 57 percent handed out an “A” or “B” grade when assessing how well local residents frequent small businesses.
While many small business owners feel supported by their local community, only 31 percent of Bay Area entrepreneurs believe that policymakers appreciate small business owners.
Larger economic concerns remain
Although overall economic confidence is running high, San Francisco entrepreneurs still have concerns over specific issues. Among the categories surveyed, health care costs (61 percent) and the effectiveness of U.S. government leaders (61 percent) are the top concerns among Bay Area small business owners.
When asked about the impact of specific government policies, Bay Area small business owners say the greatest potential for a positive impact on their business could come from expanded tax breaks for automatically enrolling employees into retirement savings accounts (35 percent) and incentives to keep jobs on U.S. soil (32 percent). Conversely, the policies that would have the most negative impact on their business would be required health care plans for employees (37 percent) and an increased minimum wage (28 percent).
For an in-depth look at the attributes of the nation’s small business owners, read the full spring 2015 Bank of America Small Business Owner Report, and for additional San Francisco-based insights, download the Small Business Owner Report San Francisco infographic here.
About the Bank of America Small Business Owner Report
Braun Research conducted the Bank of America Small Business Owner Report survey by phone, from March 4, 2015, through March 27, 2015, on behalf of Bank of America. Braun contacted a nationally-representative sample of 1,000 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 also 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 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 largest 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 48 million consumer and small business relationships with approximately 4,800 retail financial centers and approximately 15,900 ATMs and award-winning online banking with 31 million active users and approximately 17 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.
Visit the Bank of America newsroom for more Bank of America news.
Reporters May Contact:
Colleen Haggerty, Bank of America, 1.213.621.7414