The Golden State of Entrepreneurship

From May 5-11, the Small Business Administration (SBA) will hold its National Small Business Week, an annual event recognizing the economic and social contributions of the more than 30 million organizations that make up America’s small business community.

More than ten percent of these—3.9 million as of last year, according to the SBA’s count—are based right here in The Golden State, making California one of the best states for small businesses.

What makes California such fertile ground for entrepreneurship? History. The state has always been a place of opportunity with forward thinkers and visionary businesses going back, it seems, more than 150 years. This pioneering spirit traces its origins all the way back to the middle of the 19^th century, to the start of the California Gold Rush.

It started at Sutter’s Mill

When gold was discovered at Sutter’s Mill, east of Sacramento, a steady stream of fortune-seekers from all over the country began to pour into the state, hoping to strike it rich. Soon, an entire crop of small industries sprang up to serve the needs of this early boomtown. While most prospectors never reaped the wealth they envisioned, many of the businesses created in that period—Levi’s jeans, for example—struck proverbial gold and grew.

Moving into the 20^th century, the growth of the burgeoning film industry, which became emblematic of California, coincided with expanding agriculture and oil industries, the latter of which fostered rapid adoption of the automobile. The ever-expanding population fueled steady growth through the 1950s, and in the 1980s Silicon Valley emerged as a hotbed for technological innovations that helped create the digital world we know now.

Today, California boasts the fifth-largest economy in the world—larger than that of many countries, including the UK. It is home to some of the best-rated cities in the nation for small enterprise. According to a study last year, Los Angeles, Riverside, San Francisco, Sacramento and San Jose all make the list of the top ten cities for small business success, with strong technology and service sectors providing a foundation for the local economies. Great weather, a large, well-trained workforce, natural resources and accessible local, regional and global markets all position California as a welcoming place for aspiring businesspeople.

Best California small businesses

Want to open a California small business of your own? There are many viable options to consider, many of which extend beyond the obvious. Apart from the state’s famous concentration of tech startups, the related e-commerce and electronics segments form the basis for thousands of companies. California is a  friendly market for alternative energy-related business activity as well, leading the movement to incorporate renewables. As a result, the solar and wind energy industries are creating space for motivated upstart enterprises to fill.

For those interested in consumer trends, some of the world’s most popular shoe companies are headquartered here and given the state’s penchant for Hollywood glamour, the beauty industry is a thriving component of the economy. You may not know it, but California’s large population also supports strong educational industries, providing instruction in fine arts, athletics, language and dance supplemented by non-instructional educational support businesses like counseling, testing and curriculum development.

Keys to success

Like anything worth doing, starting a small business involves a degree of risk. Having a solid plan and staying grounded in the basics can help a small business survive and thrive. Start with these elements to incorporate and innovate:

• Strategy
  Strong businesses begin with a strategic focus, both in terms of a pre-launch business plan and a plan to market the selected offerings. In either case, consistency of vision is key. Learn as much as possible about your target market and be sure you’re up-to-speed with a product or service, a message and a mechanism to win over your audience in a consistent, mutually beneficial way.
• Team Building
  Small businesses, especially startups, require special qualities in their employees. Finding the right talent involves more than simply hiring qualified people. Skills are important, of course, but if your team members are not fully committed to your business’s vision, and if they cannot function properly as a unit, it can be difficult to push ahead. Take advantage of California’s can-do mindset to motivate, resolve conflict, foster initiative and encourage continuous improvement.
• Quality
  One of the main factors that still sets successful small businesses apart is quality service, and it is one of the best ways to turn first-time customers into regulars. The first step is clearly identifying the need your product or service satisfies in the market. With this in mind, you can strategize ways for your product or service to add value for your customers. In typical California fashion, look for unmet needs in the market that can be provided efficiently online or can be offered with highly personalized service.
• Volume
  This may not be your greatest consideration when starting out, but a successful strategy for growth and stability needs to include methods for increasing sales. This type of growth is the litmus test for marketing efforts and product quality, so always plan with an eye to not just becoming profitable but to expanding for the future.

As we celebrate National Small Business Week, remember that the lifeblood of any small business is having access to reliable capital to get the business off the ground. California Bank & Trust is a lender that understands and is dedicated to the state’s small businesses. If you’re considering a startup, find and work with one of CB&T’s experienced banking specialists who can help you plan those first steps. Or start here for help launching or expanding your business in California.[cite::171::cite] [cite::172::cite]