As The City prepares to kick off the 45th annual Small Business Week today, generalizations about how local small businesses are faring in the face of the national economic downturn are tough to make.
“It depends on the size and type of the business and also the location,” said Mark Quinn, the district director of the San Francisco Business Administration. “Obviously, things like housing construction are down, but exporting and international trade are seeing the benefit of the weak dollar. So it really varies.”
The signs are not all encouraging. In a survey of 500 local business leaders — both large and small — released by the Bay Area Council in March, the confidence index was just 38 out of 100. That figure is down from 60 one year ago.
“In terms of confidence, it was the lowest the survey has ever registered,” said John Grubb, the BAC’s vice president of communications. “[The survey] has been going since before the dot-com busted, and this was lower than that.”
Gary Marshall, a public information officer for the Small Business Administration, uses the attendance numbers of the organization’s classes — which offer training for entrepreneurs in all aspects of starting and running a business — as a barometer for the local economy. At the end of 2006, Marshall estimated 700 to 750 people attended the classes each month.
“Now it’s closer to 850,” Marshall said. “You see a consistent rise in attendance in those classes as the economy drops.”
On the other hand, The City’s tourism industry is booming, as the devalued dollar is drawing a greater number of international travelers to the Bay Area.
The San Francisco Convention and Visitors Bureau will release its 2007 economic impact report this month, but Director of Public Relations Angela Jackson said both small and large businesses within the sector are thriving. In its latest survey, the organization found that hotels boasted a 73.9 percent room occupancy rate in February — up from 65.9 percent in February 2006. The average daily rate for hotels for the month was $197.90, up from $182.61 in the same period last year.
“Based on the occupancy rate and meetings with hotels, restaurants and other tourist attractions, tourism is up across the board,” Jackson said. “People are coming more often and staying longer.”
Local businesses in other sectors have relied on reputation and strong costumer service to remain strong. Cole Hardware owner Rick Karp, who will receive an award for the Best Family Business in Northern California today, said his company has taken actions, such as eliminating delivery fees, as a gesture of goodwill to costumers.
“We don’t really tailor our business to the shifting economy — if anything, [in tough times] we actually try to do more for free for people,” Karp said. “We feel that when times get tough, people like to shop with businesses they know and trust, and we try to make it as easy to shop here as possible.”
Quinn said that while the business climate invariably shifts, small businesses have always found a way to adapt, survive and thrive.
“Small businesses historically have to weather economic cycles and look for new ways to adjust,” Quinn said. “And historically, they have.”
Big roles, concerns for small businesses
Small businesses represent the heart of The City. Statistics show just how important they are and what issues they have:
$4.5 billion: Yearly sales generated
355,000: Approximate number of San Franciscans employed (more than half of The City’s work force)</p>
50%-plus: Market share in books, sporting goods and limited service dining
44.4%: Market share in toys and gifts
60%: Rate at which the local economy should be reinvested in, rather than chain stores and online retailers
39%: Percentage of small-business owners think the climate for small business in California will get “somewhat worse” during the next few years.
22%: Percentage of small-business owners that think it will get “somewhat better”
Figures courtesy of a 2007 survey by the San Francisco Locally Owned Merchants Association and a survey by San Francisco Small Business Advocates