Running a small business in California is no easy feat. The struggle is amplified in Silicon Valley, where costs and regulations are often prohibitive. In the South Bay, for companies outside the tech industry, small business owners are struggling to adapt to the recent minimum wage increase. For those who aren’t aware of the recent change, the state increased the minimum wage on January 1 to $10.50 per hour for companies with 25 or more employees. Smaller businesses will follow suit in the coming years, as California legislators hope to reach $15 per hour by 2022.
Develop a Quality Product
This may sound discouraging, but a number of small businesses are tackling these challenges head-on — and succeeding. Manresa Bakery, with locations in Los Gatos and Los Altos, announced last quarter that they will ship their artisan bread anywhere in the continental U.S. Head Baker and partner Avery Ruzicka devised this strategy from the kitchen of Chef David Kinch’s three-Michelin-star Manresa restaurant.
Know Your Customer
Manresa isn’t the only successful small business in the area. Bill Phelps, CEO of fast food franchise Wetzel’s Pretzels, is making a substantial profit despite the minimum wage increase. The franchise currently boasts 100 outlets in California, and is finding success in the industry. Phelps understands his product, and offers true value to Wetzel’s customers.
Business Lessons We Learn
In short, many Silicon Valley businesses are struggling to keep bottom-line costs low. As large-employer campuses like Facebook and Google offer incentives (think meals and dry cleaning services) for staying on campus, employees are less likely to frequent small establishments, and business suffers as a result.
The trick here is to make sure that companies develop their product and attract a band of loyal customers who will go out of their way to support local businesses.
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Editor’s Note: Thank you to the following online articles for the initial announcement of these successful businesses. Pictures are the property of Hidden Silicon Valley. Please contact for permission to use.
Manresa Bread in Los Gatos Now Ships Nationwide, By Santa Cruz Foodie-Tara Fatemi Walker November. 13, 2016
Fast Food CEO Says Higher Minimum Wage Boosts Business, By Sam Harnett January 3, 2017