Business Upstarts Keep Climbing

This article is a special feature from our intern, Nick Kazden, to share his findings from a research project he has worked on to uncover patterns in the Business License Database and provide analysis of what our current business climate looks like compared to previous years’ data. It is important to note that the business license database only shows businesses who have obtained a license and does not provide information about whether or not businesses have closed over time. With that disclaimer, we are looking at the numbers as a general snapshot of the overall business climate, not a precise analysis.

As rumors of another recession gain steam due to potential forthcoming interest rate increases and a major national campaign season it becomes too easy to get bogged down in the negative and disregard positive economic growth on the ground. The truth of the matter is last year was amazing for Santa Cruz and everyone should celebrate!

In 2015, more businesses opened in a one year period than ever before based on the business license database records, with 439 business licenses filed.  

Number Of Licenses Per Year

So take a step back and enjoy the good news; Santa Cruz’s economy is in good shape with numerous restaurants, breweries and creative business opening each year. Compared to 2005, 300 more licenses were filed in 2015, and we have had consistent growth since the 2008 recession. But just saying Santa Cruz experienced economic growth doesn’t really paint a dynamic picture, so let’s jump right into it.

New Business Licenses Per Industry 2015 Chart

The Nine Identified Industries

The Economic Development team divides the city’s industries into 9 primary categories which include tech, artisanal, organics, creative, retail, tourism, genomics, sports and marine. Openings in tourism, retail and creative work pushed growth more than anything else in 2015, meaning we’re luring people into town and then giving them plenty of reasons to visit again and again (and hopefully at least one more time for good measure). Interestingly, tech showed steady growth between 2014 and 2015, though it is hard to measure because of our nontraditional “boutique” tech environment with many entrepreneurs operating in a consultant capacity rather than a traditional firm. And furthermore, the continual growth of our vibrant art scene will lead to an ever steady increase in local creative work and our growth as a tech hub adjacent to Silicon Valley.

We also noticed some positive signs of good news to come for our local housing crunch: more general contractors and real estate managers have been opening shop than ever before which could signal a growth in construction of new housing units.

There’s good news too for entrepreneurs and those that want to be their own boss, sole proprietorships are popular in Santa Cruz. Almost 300 more sole-proprietorship were filed in 2015 than both small and large businesses combined, showing just how independent many Santa Cruz workers are. There are also more small businesses (fewer than 5 employees) opening up than larger companies, a sign of the tight knit teams apparent in local firms.   

Number Of Employees

Location, location, location, huh? Downtown had the most business openings in 2015, followed by the Eastside in second for the most new businesses, with the Westside trailing in a distant third. While downtown might have the most openings, the east side has experienced the most growth, driven by the high number of annual openings on Soquel Avenue.  

Business Openings By Location

Nothing is perfect and unfortunately some businesses did permanently shut their doors in 2015, but if every year can be as productive as last year, Santa Cruz's economic outlook is looking good.

Let the Business Roadmap Be Your Guide

In Depth: Kendra Baker and Zach Davis