Area Business Owners Most Likely to Offer Perks to Retain and Attract Employees
As the year comes to a close, the majority of San Francisco-area small business owners are confident that their year-end revenue will exceed that of 2016, and they are projecting that growth will continue into the year ahead. According to the fall 2017 Bank of America Business Advantage Small Business Owner Report, a semi-annual survey of 1,000 business owners across the country and in the greater Bay Area, 66 percent of San Francisco entrepreneurs expect their revenue to increase over the next 12 months, up 7 percentage points from one year ago and 15 percentage points higher than the national average. In the near term, 86 percent of San Francisco entrepreneurs are confident that their year-end revenue will exceed that of 2016.
This confidence accompanies a growing optimism in the local San Francisco economy, with 59 percent of local entrepreneurs expecting it will improve over the next 12 months — 11 percentage points higher than the national average. While there is considerably less confidence in the national economy (41 percent), Bay Area entrepreneurs are looking at 2018 to be a growth year for their business:
“San Francisco entrepreneurs are very confident in their local economy and expect that it will continue to provide the kind of environment that they need to thrive and succeed,” said Emily Shanks, Northwest region small business executive at Bank of America. “This confidence and optimism has entrepreneurs ready for a strong 2018, with more than two-thirds looking to grow over the next five years.”
Concern about specific economic factors has held steady or significantly declined year over year. Health care costs continue to be the top economic concern at 69 percent, holding steady from last fall. Though they were previously some of the biggest worries for Bay Area entrepreneurs, concern over corporate tax rates and interest rates have fallen 9 and 10 percentage points, respectively, to 47 percent. Other top concerns include:
Stock market (53 percent, steady since fall 2016).
Consumer spending (52 percent, steady fall 2016).
Strength of the U.S. dollar (49 percent, down five percentage points since fall 2016).
Commodities prices (49 percent, steady since fall 2016).
Small business owners in the Bay Area are thoughtful about finding ways to retain talent, with 67 percent taking steps within the past two years to do so, including offering flexible hours or work locations (44 percent) and providing paid or unlimited vacation (20 percent). Notably, 31 percent of San Francisco entrepreneurs also offer employee perks such as allowing pets in the workplace — 14 percentage points higher than the national average and the most of all 10 major cities surveyed.
In addition to enhancing company culture, more than nine in 10 San Francisco entrepreneurs give employee wage increases and promotions, with most raises given on an unscheduled basis (54 percent), driven by either employee performance or positive business growth, and more than a quarter report giving employee raises every year (vs. 22 percent nationwide).
Two out of five San Francisco small business owners believe social media has a positive impact on their business’s bottom line. Of the top ways Bay Area entrepreneurs use social media, 62 percent use it to market their business, 61 percent use it to research the marketplace and competitors, and another 61 percent report they use social media to network and connect with their peers. Additionally, local small business owners are using social media to proactively share updates and promotions with customers (53 percent) and respond to customer feedback (53 percent) at much higher rates than their national counterparts (41 percent and 39 percent, respectively).
While most Bay Area entrepreneurs see social media as having a positive impact on their business, 45 percent admit to having made a business blunder on mobile or digital channels at some point. Top business blunders among San Francisco entrepreneurs include incorrectly scheduling appointments or meetings (20 percent), customer confusion due to outdated information found online (18 percent) and inaccurately processing payments (14 percent).
Beyond social media, an overwhelming number of Bay Area entrepreneurs are adopting digital tools to assist in their day-to-day operations. Eighty-six percent of San Francisco business owners use at least one digital tool to run their business, with digital banking (58 percent) and financial tracking and/or accounting apps (50 percent) reported as the most popular solutions.
With 2017 revenues exceeding expectations, 82 percent of Bay Area entrepreneurs plan to reward their employees with holiday perks this season, including:
Office closure during the holidays (42 percent).
Flexible hours and vacation time (42 percent).
Salary bonuses (40 percent).
Employee gifts (39 percent).
A holiday party (37 percent).
Additionally, a strong majority of Bay Area entrepreneurs plan to participate in charitable efforts this holiday season, such as making financial contributions to charities or nonprofits (44 percent), giving employees time off to volunteer (27 percent), and organizing charitable giving programs (14 percent).
GfK Public Communications & Social Science conducted the Bank of America Business Advantage Small Business Owner Report survey for fall of 2017 online between August 8 and September 28, 2017 using a pre-recruited online sample of small business owners. GfK contacted a national sample of 1,013 small business owners in the United States with annual revenue between $100,000 and $4,999,999 and employing between two and 99 employees. In addition, a total of approximately 300 small business owners were also surveyed in each of ten target markets: Atlanta, Boston, Chicago, Dallas/Fort Worth, Houston, Los Angeles, New York, Miami, San Francisco and Washington, D.C. Approximately 150 interviews each were also completed among respondents in the tech and medical/health care field. The final results were weighted to national benchmark standards for size, revenue and region.
Prior to 2016, waves of the Small Business Owner Report survey were conducted by telephone and while best efforts were made to replicate processes, differences in sample, weighting and method suggests caution when making direct statistical comparisons of the results from pre-2016 and post-2016.
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 4,500 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with approximately 34 million active users, including approximately 24 million mobile users. Bank of America is a global leader in wealth management, 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