Downtown San Jose Business Market Research Business Owner Survey Results June 2009
Downtown San Jose Business Survey 1. What is the nature of your business? (58 respondents) Selected by 32.8 percent of respondents, restaurants are the most common businesses operated among owners surveyed. Retail is the next most commonly operated business (19.0%). Of the four respondents who checked other, responses include art gallery, cocktail bar/lounge, entertainment, and rental property. 2. How long have you been operating this business in Downtown San Jose? (54 respondents) Most respondents have been operating their business in Downtown San Jose for over ten years (35.2%). The next most popular age of a business is 5-9 years (24.1%). Overall, more than half of respondents (59.3%) have operated their business in Downtown San Jose for over five years. 1
3. Name up to three advantages or strengths you associate with doing business in Downtown San Jose. (46 respondents) Convention Center and Arena events were cited as the most common advantage of doing business in Downtown San Jose (13.1%). Respondents cited the high weekday population as the next strongest advantage (9.3%), followed by high traffic volume and accessibility (7.5%). Due to the open nature of this question, many answers were unique and have been grouped into the other category (29.9%). Examples include proximity to library, neighborhood support, safety, and parking validation. Some answers simply state location and do not help isolate the specific strengths of Downtown San Jose. Other None Close to Services/Amenities High traffic Accessibility Residential Population Professional Weekday Population Diversity Public Transportation Restaurants/Bars Convention Center/Arena Events Proximity to City Hall Students/San Jose State 0 5 10 15 20 25 30 35 Number of Responses 4. How satisfied are you with the following aspects of your space? Please check the appropriate number. (56 respondents) Most respondents were unsatisfied with the availability of parking (56.4%). In regards to parking cost, accessibility, and public safety, more respondents were neutral (29.1%, 38.5%, and 35.8%). Over 20 percent of respondents were very dissatisfied with parking availability, parking cost, and accessibility. 1 - Very Dissatisfied 2 3 - Neutral 4 5 - Very Satisfied Parking availability Parking cost Accessibility (ADA, deliveries, etc.) Public Safety 14 17 10 10 4 25.5% 30.9% 18.2% 18.2% 7.3% 15 13 16 9 2 27.3% 23.6% 29.1% 16.4% 3.6% 12 6 20 9 5 23.1% 11.5% 38.5% 17.3% 9.6% 6 11 19 12 5 11.3% 20.8% 35.8% 22.6% 9.4% 2
5. How would you characterize your current business activity level (i.e. last 12 months of operation)? (55 respondents) Almost half of respondents reported declining business activity (49.1%). Only 16.4 percent of respondents reported rapid or moderate growth. Business is rapidly expanding Business is moderately Growing, increasing Holding your own (same level of business, fairly steady) Declining business activity (fewer clients, fewer sales, less income) 0 5 10 15 20 25 30 35 40 45 Number of Responses 6. Which description below best characterizes your plans to expand or reduce your operation in the next 18 months? (56 respondents) 42.9 percent of respondents reported that they have no plans to change their business operations in the next 18 months. More respondents plan on expanding (12.5%) rather than reducing (7.1%) their operations. Other responses include: Hope to expand, but will see what the market dictates and Considering retirement due to decline in sales. 3
7. Please check below if your business currently has a marketing plan, business plan, or line of credit. (49 respondents) 79.6 percent of respondents have a marketing plan. 77.6 percent of respondents have a business plan. 57.1 percent of respondents have a line of credit. 8. Please check any type of investment or improvement you plan on making in one-to-two years. (56 respondents) The majority of respondents plan on expanding promotional activities within the next two years (53.6%). The next most frequently selected investment is in new or expanded services or products (44.6%). 25 percent of respondents do not plan on making any additional investments or improvements. Two respondents who answered other indicate that they plan to relocate their business. 9. What is the primary market area from which the majority of your sales are derived? (Choose just one) (56 respondents) 4
The majority of respondents derive most of their sales from the San Jose market area (53.6%). Santa Clara County was the next most popular market area (28.6%). Other market areas include: Bay Area, worldwide, and office workers. 10. If you checked Travelers/Tourists, please provide more detail on this market. (For example, We cater to business travelers. ) (six respondents) Three respondents indicated that their business caters to business travelers. Another indicated that they worked primarily with convention visitors. Of the other respondents, one indicated they were a full service travel agency and another declined to elaborate. 11. To what extent do the following Downtown activities and developments have a positive impact on your business in terms of foot traffic, customer sales, image and overall well being? (55 respondents) HP Pavilion events, museum/visitor attractions, Music in the Park concerts, and the Farmer s Market were most often described as having no positive impact on Downtown businesses. Respondents most frequently reported that Downtown residential developments had a positive impact on their business (57.4%). Respondents who marked other suggested that the jazz festival and convention center activity generated a positive impact (five). 5
HP Pavilion Events Museums/Visitor Attractions Music in the Park concert series Farmer's Market Downtown Residential Developments Other 1 - No Impact 2 3 - Neutral 4 5 - High Impact 23 5 6 15 5 42.6% 9.3% 11.1% 27.8% 9.3% 15 8 10 15 5 28.3% 15.1% 18.9% 28.3% 9.4% 13 9 10 12 9 24.5% 17.0% 18.9% 22.6% 17.0% 22 7 10 11 3 41.5% 13.2% 18.9% 20.8% 5.7% 11 3 9 22 9 20.4% 5.6% 16.7% 40.7% 16.7% 2-2 5 5 14.3% 0.0% 14.3% 35.7% 35.7% 12. In addition to a strong economy, what are the critical factors for the success and expansion of your business (check ALL that apply) (54 respondents) Most respondents reported that foot traffic was the most critical factor to Downtown business success (66.7%). Public access was the next most popular response (44.4%), followed by financing (42.6%). Respondents who marked other suggested that safety (two) and convention business (two) were critical factors that influenced the success of their business. Qualified Labor Tourism Current Inventory Up-to-date Equipment/Technology Financing Public Access Foot Traffic Other 0 5 10 15 20 25 30 35 40 Number of Responses 13. What are some of the major issues or obstacles facing your business today? (Please check the TOP FIVE priority issues.) (57 respondents) 6
A strong majority of respondents reported that the current condition of the economy is the largest obstacle faced today (75.4%). Parking was the next most frequently reported obstacle (49.1%), followed by cash flow and property rents (42.1%). Under the other category, three respondents cited the police as an obstacle, one of which suggesting that the police have scared most of our regulars out of Downtown. Customer traffic (not enough/shrinking) Property improvements (façade, etc.) Cost of rent/property Availability of telecom services Cash flow/working capital General operating costs Outdated machinery/technology City/County/State codes or regulations Skill level/preparation of employees Current economic conditions Public safety/crime Parking Payroll costs Competition Insurance costs Availability of employees Computer/technology Issues Other 0 5 10 15 20 25 30 35 40 45 50 Number of Responses 14. Please expand on any of your answers to the question above. If you checked "City/County/State code or regulations," please explain the issues or obstacles (31 respondents) (27 respondents) Not being able to furnish live music without a permit. Also, parking meters and aggressive enforcement tactics discourage customers. It is virtually impossible to obtain the correct answer or process for anything you need to do when dealing with the city. Left hand does not know what the right hand is doing when it 7
comes to city employees. No streamlined processes, extremely hard to open a business or to renew permits because no one in city hall has correct answers, especially the counter employees. The validated parking program is a bit cumbersome. We tend to run out of validations by the end of the month, even though we have increased the amount we purchase. Also, it s unclear if guests are charged a flat rate of $3.00 after 6:00 even though they have validation stickers. Parking enforcement is scaring customers away. They may collect $8 million a year, but they are scaring away $250 million a year to shop elsewhere. 15. To keep your business healthy and competitive, which of the following types of information or assistance are important? (46 respondents) Most respondents reported that marketing/advertising information or assistance programs are important for their business to remain healthy and competitive (67.4%). The next most popular response was business planning assistance (37%), followed by e- commerce and property/façade improvements (26.1%) Respondents require the least amount of assistance with employee training (10.9%) and computers/technology (8.7%). 16. The San Jose Redevelopment Agency offers a variety of assistance to business and property owners within Neighborhood Business Districts and Downtown San Jose. For the programs and services listed below, please let us know your familiarity with them and, if you have used them, please rate your level of satisfaction by checking the appropriate box. Please share any questions or comments about these programs/services in the box below. (47 respondents) For each option, respondents most frequently reported that they had not used the associated SJRA program. 8
The most popular program appears to be the signage grant, which 21.7 percent of respondents reported they were very satisfied with. While many respondents reported neutral or higher experiences with permit processing and fee payment assistance, 12.8 percent reported they were very dissatisfied. Have not used Would like more info Have used 1 - Very Dissatisfied 2 3 - Neutral 4 5 - Very Satisfied Architectural design services Permit processing and fee payment assistance Bidding and construction management assistance Storefront improvement grant Signage grant Small business loan program 38 4 0 2-3 2 2 80.9% 8.5% 0.0% 4.3% 0.0% 6.4% 4.3% 4.3% 22 3 5 6-5 6 5 46.8% 6.4% 10.6% 12.8% 0.0% 10.6% 12.8% 10.6% 33 2 1 2-7 2 1 70.2% 4.3% 2.1% 4.3% 0.0% 14.9% 4.3% 2.1% 32 5 0 2-5 2 3 69.6% 10.9% 0.0% 4.3% 0.0% 10.9% 4.3% 6.5% 22 6 4 1-5 4 10 47.8% 13.0% 8.7% 2.2% 0.0% 10.9% 8.7% 21.7% 31 8 0 3 1 5 - - 68.9% 17.8% 0.0% 6.7% 2.2% 11.1% 0.0% 0.0% 17. Please share any information about why you may or may not have utilized the programs/services available. (21 respondents) Seven respondents listed that they did not know these programs were available. Two suggested that they were not necessary. I became discouraged with the small business loan program it took too much time. It would have been very frustrating to go through the whole process and get declined. 18. What is the best way for you to receive information about and to access City programs? (Please check your top two choices.) (44 respondents) Most respondents indicated that e-mail would be the best way to notify them about City programs (72.7%). The next most popular method is a personal business visit (38.6%). Events, workshops, and seminars are the least favorite notification methods (13.6%). 9
Personal business visit E-mail U.S. mail Business event, workshop or seminar Other 0 5 10 15 20 25 30 35 Number of Responses 19. Are you interested in participating in a cooperative business marketing effort to attract customers to Downtown San Jose or to encourage residents to shop locally? (46 respondents) Yes 67.4% (31 respondents) No 32.6 % (15 respondents) 20. If you answered "yes," may we contact you about future business promotions? (34 respondents) Yes 76.5% (26 respondents) No 23.5% (eight respondents) 21. What identity or image would you like to see Downtown San Jose develop for itself as a unique shopping district attractive to residents, employees and visitors? (38 respondents) There needs to be a master plan that dictates where businesses can locate, not a disparate plan that lets each landlord decide what goes into their space. For example, Popeye's next to the bus stop does not encourage anyone to shop on that block -- do you think the Gap would want to open on that block? The city needs to focus on 3 or 4 main streets and work collectively to make them a showcase and to tie them together, both in terms of what they offer and for easy accessibility. Folks need a central place to shop - pure and simple. Shoes stores, clothing stores, all in one convenient location with plenty of free parking. Why go Downtown and risk getting a parking ticket, be forced to pay for parking, or fail to find parking when you can go to Valley Fair or Santana Row and park care-free and shop to your heart's delight? No one comes Downtown to shop - they come for special events. Downtown San Jose is not a Downtown - it is a special events zone. An area where you can see world famous concerts, award winning art galleries, numerous theatre venues and world class dining. University/Business/Art Urban center with lots of amenities available, so people who live in the Downtown can have all their needs met. This will also serve to attract others into the Downtown. 10
Stress the "green" livability of working, living, shopping, recreating without having to go to a mall. Stress a "real" urban experience, as opposed to the Disneyland meets Rodeo Drive fakery of Santana Row, while taking a lesson from their pro-pedestrian streets with nice places to sit and talk, and their nightmarish parking situation. Create a homegrown business environment in keeping with the green esthetic: shop local. Maybe provide bikes that can be borrowed to ride between SJSU and the new San Pedro Market area or other areas Downtown to avoid driving/parking issues. Integrate the First Fridays with shopping options to create an alternative place that's creative and happening. Downtown San Jose needs to develop an image of uniqueness, offering an experience that cannot be easily duplicated elsewhere. Chain stores are fine, but you need more and funkier boutique types of stores which will bring in a higher end, more eclectic crowd. 22. How would you rate your overall confidence in the economic future or vitality of Downtown San Jose as a whole? (48 respondents) 50 percent of respondents indicated that they were moderately confident in the economic future or vitality of Downtown San Jose. 16.7 percent expressed a high level of confidence while 27.1 percent expressed low confidence. 23. What types of businesses (products and/or services) do you think should be recruited to Downtown San Jose to improve its attractiveness as a shopping and business district? (40 respondents) 33 respondents indicated that additional retail stores are needed in the Downtown. Suggestions include clothing stores, groceries, book stores, and large anchor tenants. Reputable clothing retailers, shoe stores, grocery stores, health food stores, furniture stores, appliance stores, genuine New York-style deli, BART, etc. We need a shopping district Downtown. Department stores, grocery stores, drug stores, gift shops and boutiques, more art and entertainment options. Unique stores, let owners be creative and get rid of restrictions on signs. National clothing retailers (i.e. Gap, Old Navy), national restaurant chains (i.e. Pizza California), family-oriented businesses/establishments. These types of well-known businesses will attract more people and show that there is confidence in Downtown as a business and retail destination. 11
Encourage the arts - performance, music, & cultural. Fill in the empty spaces! Create and foster an entrepreneurial spirit in Downtown. 24. Please share with us any other comments you may have. (18 respondents) Taste of Downtown is great. We need a similar event for retail and services and an 'Experience Downtown' rack card for residents. I have used the entrepreneurship center and San Jose State business programs. Since then, I have become an advocate for entrepreneurship and the Downtown. I am from San Jose and saw that there was a lot of potential. Four years ago there was nothing here and I banked on the SJRA visions now it looks better and cleaner. San Jose is great place to live!! Continue the momentum. A lot of entrepreneurs come to me and I encourage them to go to the entrepreneurship center and understand what it takes. Financial backing from the City is also needed. We need help - the drop in visitors to Downtown has seriously affected our business. We would like advice on how to renegotiate the terms of our lease to lower our rent. If that is what is meant by technical assistance by all means contact us. We are not interested in marketing or business plans, we're not looking to expand our business - we're just trying to survive. As far as long-term - there should be five major objectives: (1) improve/expand convention business; (2) create a viable shopping district with ample free parking; (3) bring BART Downtown; (4) retain/expand companies based Downtown; and (5) strong financial and material support for the cultural, performing, and fine arts. Excellent service provided by Ms. Liz Nunez and Emily Wilcox at the Redevelopment Department. Excellent help and assistance provided by Fire Chief David Schoonover, and also Bryon Davis in the Planning, Building & Code Enforcement. I am looking forward to the San Jose Urban Market. I hope the city will continue to make a big push for the A's as I believe this will be vital in revitalizing Downtown. I strongly believe in the vision of Downtown San Jose as a destination for residents, shoppers, and visitors. The RDA has done a great job with its vision and I hope this continues. Japantown businesses are being strangled by parking meters. The Alameda, W. San Carlos, & Willow Glen's Lincoln Ave. retail districts do not have parking meters - their customers can and are encouraged to "stay a while". 12