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

SAN FRANCISCO–(BUSINESS WIRE)–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
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

Bay Area small business owners embrace workplace 2.0
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
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

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
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

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