Monday, August 07, 2006

Media Advisory


Media Advisory Contact: Ellie Schafer

Release of study conducted showing Small Businesses are the backbone of San Francisco Economy

Mayor Newsom,* Small Business Advocates

WHO: Small Business Advocate Scott Hauge, Jordana Thigpen, President of the Small Business Commission, Stephen Cornell, SF Small Business Advocates, Pat Christensen, President of SF Small Business Network as well as Mayor Gavin Newsom* and Assemblyman Leland Yee*

WHAT: Small Business Advocates will release and discuss a new study regarding small business in San Francisco.

WHERE: Front Steps, San Francisco City Hall
One Dr. Carlton B. Goodlett Place
San Francisco, CA

WHEN: 11:00 AM Tuesday August 8, 2006

*Schedule permitting
Study shows Small Business drives the economy of San Francisco

98.3% of employers in San Francisco are small businesses
with less than 100 employees

August 8, 2006 Contact: Scott Hauge
For Immediate Release 415-680-2109

SAN FRANCISCO – Today, Cal Insurance released a report which studies the economic impact of small businesses on the San Francisco economy. The study looks at the performance of San Francisco’s economy in the deepest and most extended recession the City has experienced since the great depression of the 1930’s; with the conclusion being Small Business drives the economy of San Francisco.

San Francisco had 111,674 small businesses which equaled 99% of all private businesses in the City as well as 55% of the private workforce (331,395 small business people). Perhaps the most impressive figure is small businesses in the City produce a 14.4 billion dollar annual payroll. Scott Hauge stated of the figures, “Small business is the crux of the San Francisco economy.”

One of the most eye opening figures is the fact that small business released less than 10% of their employees during the recession while large business released more than 20% of theirs, despite the two groups of businesses having similar shares of the pre-recession private employment.

“San Francisco City Government clearly needs to develop an attitude that will create and facilitate small business and we hope this study will encourage them to realize this City’s fullest potential; embrace small business and create a pro-small business atmosphere,” said Hauge.

Perhaps some of the most startling figures released in the study show that of the job losses in SF during 2000-2004, 71% of the jobs lost were of large employers. Although some small businesses lost employees, the number of small businesses operating during this time actually increased 2%.

Under the guidance of the Proposition I, which was recently passed by the voters of San Francisco, Mayor Newsom will conduct an Economic Development Study. The City will gather business representatives from across the board and Hauge said, “Small Business not only deserves a seat at this table; they have earned a seat at this table.”

“San Francisco has always had forward thinking residents and it’s time that City government catches up and realizes that small businesses are driving the economy of this city,” said Hauge.

Full details of the 110 page report can be viewed at:

Economic Impact of San Francisco Small Businesses

San Francisco had 112,431 Business employers in 2004. 111,674 of them were small businesses and/or non-employer groups (mainly but exclusively self employed).

Non Employers 69,252 100-240 Employers 514
0-4 Employers 29,994 250-499 Employers 141
5-9 Employers 5,264 500-999 Employers 66
10-19 Employers 3,649 1000+ Employers 36
20-49 Employers 2,640
50-99 Employers 875

Small Business Total 111,674 Large Business Total 757

Businesses with four or fewer employees, counting self-employed persons as a business with one employee, represented 88% of all San Francisco businesses

San Francisco Large Businesses dropped $3.1 Billion between 2000 and 2003; 2.4 times the comparable drop in the small business payroll

Small Business' percentage of Total Business Payroll jumped from 50.9% to 54% between 2000-2003

San Francisco's unemployment rate climbed from 2.8% in 2000 to 7.4% in 2002. Despite beginning a modest decline in 2003, the unemployment rate remained above 5% through the first quarter of 2006

San Francisco's vacancy rate for Class A office space soared from 4% in 2000 to 21% in 2003 and remained at this peak through 2004. The vacancy rate for Class B office space rose from 5.6% to 17% in the same period

Between 2000 and 2004, San Francisco
lost nearly 100,000 jobs representing nearly 16% of the City's private employment
lost nearly $1billion in payroll
lost 28% of its out-of-town visitor stream and the market it represents

San Francisco lost nearly a quarter (23.9% or 70,280 employees) of its large employers. These jobs represented 21% of the work force of large employers and 71% of all City based jobs.

Small Business represents 55% of jobs in SF in 2003 (42.5% as employees and 11.5% as self-employed entrepreneurs)