Bank of America Survey Finds San Francisco Small Business Owners Believe Minimum Wage Increase Will Positively Impact the Economy
OREANDA-NEWS. Seventy percent of San Francisco small business owners believe a minimum wage increase will have a positive impact on the economy, according to the spring 2016 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. This is much higher than the national average (47 percent), as well as other metropolitan areas, including Chicago (54 percent) and Los Angeles (48 percent).
As San Francisco prepares for a $15 per hour minimum wage by 2018, 62 percent of San Francisco entrepreneurs say they will need to take financial measures to compensate for an increase. The most commonly cited action will be to increase the price of products and services (20 percent), followed by reducing operational spending (13 percent). However, only 5 percent say they will need to cut staff, which is lower than the national average of 13 percent.
In addition to having a positive outlook about the California minimum wage increase, San Francisco small business owners are also optimistic about revenue expectations. Sixty-five percent expect an increase in revenue this year – an 11 percentage-point jump from last spring and higher than 51 percent nationally. In addition, plans for business growth have remained steady for San Francisco entrepreneurs, as nearly 62 percent plan to grow their business over the next five years. This compared favorably to nationwide findings, which dropped significantly in these areas. When asked how they would expand their business in the next 12 months, San Francisco small business owners said they plan to target new industries and customers (40 percent) and hire additional staff (39 percent).
“Despite rising health care costs and an imminent minimum wage increase in San Francisco, small business owners continue to be confident in their ability to grow their business,” said Emily Shanks, small business western regional executive at Bank of America. “They continue to adapt to changes in the region and express confidence that their revenue will increase in 2016.”
The survey also found that San Francisco small business owners expressed more confidence than their national counterparts in the local economy. More than half (52 percent) of area business owners anticipate it will improve in the next year, 14 percentage points higher than the national average.
Health care costs on the rise for San Francisco small business owners
Health care continues to loom prominently as an issue of importance for San Francisco entrepreneurs. Fifty-two percent of San Francisco small business owners offer health care coverage, 12 percentage points higher than the national average. In addition, 75 percent say their health care costs went up this year, with 53 percent reporting an increase of up to 20 percent – 12 percentage points higher than the national average and the highest increase reported by any market.
When asked specifically about top economic concerns for the next year, San Francisco small business owners were most concerned about the “effectiveness of U.S. government leaders” (72 percent), health care costs (64 percent) and interest rates (53 percent).
San Francisco entrepreneurs plan to invest in new equipment with loan funding
Fewer entrepreneurs in San Francisco plan to apply for a loan this year, with only 12 percent reporting they intend to seek funding in 2016, versus 22 percent last spring. Of those who intend to apply for loan funding, San Francisco entrepreneurs are most likely to use it to invest in new equipment (42 percent), hire more employees (37 percent) and invest in new technology (36 percent). Notably, 28 percent of San Francisco small business owners would use funding to invest in creating new products or services – 12 percentage points higher than the national average and highest of any of the nine markets surveyed.
Skill and work experience top hiring factors; education less so
Nearly half (48 percent) of San Francisco small business owners value skill level as the single most important factor when hiring a candidate, followed by previous work experience (28 percent) and fit with company culture (23 percent). Only 1 percent of San Francisco entrepreneurs say education level is the most important factor when hiring.
When asked to rank the qualities they find most important for prospective employees, 72 percent said they most value candidates who are trustworthy, followed by candidates who are experienced (66 percent) and hardworking (65 percent). Additional characteristics that rose to the top include communication skills (48 percent) and problem solving abilities (48 percent). Tech savvy (35 percent), sales ability (19 percent), and knowledge of STEM (science, technology, engineering and mathematics) (10 percent) were valued less.
For a complete, in-depth look at the insights of the nation’s small business owners, read the entire spring 2016 Bank of America Small Business Owner Report, and for additional insights, download the Small Business Owner Report national infographic.
About the Bank of America Small Business Owner Report
GfK Public Affairs and Corporate Communications conducted the spring 2016 Bank of America Small Business Owner Report survey online between March 17 and April 19, 2016 using a pre-recruited online sample of small business owners. GfK contacted a national 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, a total of 300 small business owners were also surveyed in nine target markets: Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami, New York, San Francisco and Washington, D.C. The final results were weighted to national benchmark standards for size, revenue, and region. Previous waves of the Small Business Owner Report survey were conducted by telephone. Best efforts were made to replicate processes in sample, weighting, and method.
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 16,000 ATMs, and award-winning online banking with approximately 33 million active users and approximately 20 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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