It’s going to be a bright year in the Sacramento region, according to local business owners. But, they believe the rest of the country may see slightly darker times.
According to Union Bank’s annual Small Business Economic Survey, 53 percent of local small business owners are confident Sacramento’s economy will continue to be positive in 2017, and 5 in 6 think their own companies will find the year productive. One in four also believes the nation’s economy is headed in the right direction.
Sacramento business owners’ optimism extends beyond 2017. Sixty percent of respondents say the economic upswing should continue through 2018.
“I'm bullish on the Sacramento region for 2017,” says Lance Loveday, CEO of Closed Loop, a Sacramento digital advertising firm. “I’m meeting an increasingly impressive number of entrepreneurs moving to the area already, and I see that trend continuing as our reputation improves and as the influx of Bay Area real estate refugees continues.”
Union Bank Managing Director Todd Hollander called the local business owners’ attitudes encouraging. “Retention of this confidence is essential if further job growth and expansion is to occur,” he says.
In contrast, only 41 percent of respondents along the West Coast believe the regional economy will improve through 2018. Similarly, one-third of Sacramento respondents expect the business climate to worsen during that time.
Scott Slavensky, president of Skatetown Roseville in Roseville, says he’s optimistic about the now, but a bit worried about 2018 and beyond. “We are very concerned about the impact the increase in minimum wage will have on us and our business,” Slavensky says. “We’ve become one of the top operators in our industry by providing very high levels of guest service that we’re not sure that we’ll be able to continue to provide.”
In January, California’s minimum wage increased to $10.50 per hour for companies with 26 or more employees. Smaller businesses will pay the existing $10 an hour until January 2018.
Nine out of 10 Sacramento businesses say they will keep staffing levels as is during 2017. This is slightly better than the 84 percent of companies nationwide that do not plan to expand payrolls this year.
Loveday says he expects his company to continue the massive growth it has experienced in the past six years. “Our current business plan over the next 12 to 18 months is to continue to grow our online and retail sales while expanding into more-customized products that you cannot find in other retailers,” he says.
Those sales in Sacramento and elsewhere are expected to be generated primarily by referrals, followed by networking and additional advertising, according to the study. If so, that would continue the efforts of the past few years. But all three are becoming less prominent.