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‘5% Pledge’ Spreads Wealth to Small Businesses in S.F.

June 11, 2015
Small Business
'5% Pledge' Spreads Wealth to Small Businesses in S.F.
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San Francisco, home to giants like Twitter and Salesforce that are helping fuel a booming city economy, is asking the big guys to give small business a hand.

San Francisco Mayor Ed Lee and the San Francisco Chamber of Commerce just launched SFBiz Connect, a program that encourages big companies to redirect at least 5% of their spending to local firms, particularly small businesses.

“These good times can be felt by all,” Laurel Arvanitidis, business development director for the city and county of San Francisco, tells NerdWallet. “They can all benefit from these good times we’re having. … What we hope to see is new relationships forged that provide opportunities to all San Francisco businesses.”

Bob Linscheid, president and chief executive of the San Francisco chamber, says the program aims to provide a bridge between big and small companies.

“It’s almost like matchmaking,” he tells NerdWallet. “It was the mayor’s feeling that San Francisco is doing quite well. If we changed the spending habits of big businesses by 5%, it could be a world of a difference for small businesses.”

To join, any San Francisco business can take the so-called 5% pledge, which means agreeing to shift an additional 5% of its spending to local and small businesses, according to the SFBiz Connect site.

Small businesses can register at the website, which helps big companies find local firms that can meet their needs.

The program is geared mainly toward small businesses that serve other businesses, including food and beverage companies and firms that offer events, catering and professional services.

One business that has taken the 5% pledge is Hyatt Regency San Francisco, which is working with La Cocina, a local group that helps low-income food entrepreneurs. La Cocina facilitated a partnership between Hyatt and two local businesses that now provide souvenir items for hotel guests.

Recology, an employee-owned waste management and recycling firm, also took the pledge.

Robert Reed, Recology’s public relations manager, says the company, which has roughly 1,000 employees, turns to local small businesses for a range of needs, including food for events and printing and graphics services.

“We understand that small businesses are the backbone of the economy,” Reed says. “Small businesses are our customers, and we’re their customers. So there’s a shared relationship.”

Arvanitidis says SFBiz Connect will have a meaningful effect not just on small businesses, but also on San Francisco as a whole. The city will conduct an annual survey to “calculate how much more money is flowing back into San Francisco because of this,” she says. The city estimates that a 1% boost in spending at local restaurants and retailers could mean an additional $100 million to the local economy, she adds.

One company taking the 5% pledge was a San Francisco small business itself not too long ago.

Airbnb, whose globally popular site lets people rent out their homes, says “shopping locally is a reflection of our values.”

In endorsing SFBiz Connect, Airbnb says on the program’s site: “The growth of our company and community — which has exceeded our wildest expectations — has only been possible because we call San Francisco our home.”

For related information, visit NerdWallet’s resources on how to start a business. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Benjamin Pimentel is a staff writer NerdWallet, a personal finance website. Email: [email protected]. Twitter: @benpimentel.

Image via iStock.