It’s a sector beset by trauma: the pandemic, on-line shopping and in San Francisco, even more: high rents, crime and poor street conditions, and limited parking.
And yet, the San Francisco entrepreneur is alive and kicking: Every month across the city, 125 restaurants and bars, 75 new retail locations and 30 new service providers (like gyms) open. That’s according to a May 2025 report from the Office of the Controller. A city map of registered businesses shows 65 new businesses that opened in the past month in the Mission, 13 in the Inner Richmond, and 14 in the Excelsior.
The number of new retail shops opening has declined from the last year — then, about 100 shops opened per month. But, San Francisco’s Chief Economist Ted Egan said, “small businesses like restaurants, bars, [and] neighborhood services are growing. It is a slow recovery from COVID-19, but it is a recovery.”
Egan said the city’s long-term economic growth has “pulled small business forward to a certain extent.” Good economic times often mean good times for small businesses too, Egan added, and although downtown San Francisco is rife with vacant commercial spaces, a 3.6 percent unemployment rate citywide means the city is fairly healthy and the neighborhood corridors are not doing badly.
And maybe the overall city economy just doesn’t matter to the entrepreneurial type. Take Haydee Montserrat Mata, the co-owner of Morning Vibes Cafe who opened on April 8, 2025. Mata opened because of the passion she developed for serving good coffee when she first arrived in California at 18. The current economy? It simply didn’t worry her.
When she saw the former gelato store available for lease at 1392 9th Ave, she was drawn in by the space’s high ceilings and big windows overlooking one of the Inner Sunset’s busier corridors. She seized the opportunity with her husband and co-owner, Victor Caicero. If some aspect of the business was not succeeding, she could always make adjustments.
“If you wait until everything is perfect, it never will be perfect,” she said.
Her competitive edge in a neighborhood full of cafes? Offering products that others don’t.
“We brought Latin American flavors in our coffees, so it will be something different than the other coffee shops,” she said. Among them: specialty drinks like Mexican mocha or horchata lattes, açaí bowls, deli sandwiches, and fruit smoothies.
Since Morning Vibes opened nearly three months ago, Mata has seen anywhere from 80 to more than 100 customers a day walk in, she said. Plus, she said, the Inner Sunset’s business community has been welcoming. Neighboring business owners have come in to ask how they can support her, and keep coming back to check in about how business is going.
Mata’s not alone. San Francisco has 90,000 businesses with fewer than 100 employees, according to the most recent available data from California Economic Development Department. That number is up by 6.3 percent from 2013.
Of those roughly 90,000 in 2023, nearly three-quarters provide services and 78 percent employ just zero to four people. Such businesses – accommodation, food services and leisure and hospitality lead the pack – have dominated the small business landscape for at least for the last decade.
Those small businesses with four or fewer employees comprise 74 percent of the city’s small businesses and are generally the ones found on the city’s commercial corridors.
Retail is the toughest to get traction. However, in the wake of the closure of large chain stores chains like Saks, Target, and Macy’s, smaller neighborhood boutiques have proved resilient. A total of 4,503 small retail stores operated in 2023, compared to 5,783 operated in 2013 — a 4.98 percent drop.
Small stores that have succeeded – like Ambiance, for example, have closed unprofitable locations, and constantly tweaked their merchandise to get a sense for what their customers want.
But still, it remains the most difficult sector. As a business owner, Cynthia Huie, President of San Francisco’s Small Business Commission, felt the difficulties of retail first-hand when she operated Seedstore, a clothing store in Inner Richmond. Online competition sapped its sales and the store closed in February 2020 after roughly a decade in business.
“Businesses are going to do well if people are actually shopping at them, eating at them, and going to them,” Huie said. And that is more difficult for retail.
Service providers have been least threatened by the move to online shopping. And, in this sector, San Francisco offers a young population that wants to keep in shape.
Gyms have proliferated. Here, the competition means owners have to be mindful of caring for their customers. Lawanda Dickerson, a Small Business Commissioner (SBC) and the owner of U3Fit, a gym in Bayview, says her service skills have to be “stronger than even my product.” She’s on time, cordial and makes sure to offer an array of services.
And she’s mindful of their prices – maintaining them, but increasing revenue by adding services like food and testosterone and vitamin injections.
When she speaks to clients, some of whom are first-time business owners, she understands “the inexperience is going to bring up a lot of questions.” She recommends owners do research on their neighborhood of operation and understand the resources available through the SBC and Small Business Development Centers.
Citywide outlook
Huie from the Small Business Commission said she feels hopeful about the small business landscape. Recent legislation at the SBC has tried to reduce permitting delays for owners by removing duplicate processes and addressed other “speed bumps along the way,” she said.
The city’s First Year Free program waives initial registration fees, license fees and first-year permit costs, for new small businesses. The initial version of the program began in November 2021, and as of June 2025, 10,722 businesses have enrolled in the program.
No policy can draw in more consumers, though. And, street conditions remain an issue.
Dr. Anoshua Chaudhuri, an economics professor at San Francisco State University, led survey efforts assessing small business recovery from the pandemic in 2021 and 2022. The outlook for small businesses is still unclear Chaudhuri added, with different neighborhoods in San Francisco recovering at different rates from the pandemic’s effects. She points to the Marina, West Portal and Sunset corridors as being particularly strong.
“I know the mayor is cracking down on crime, [and] is pro-business,” she said. “But it’s still early, I don’t quite know exactly how it’s going to all play out.”
Still, the small entrepreneur keeps hoping. Jacquelyn London, who opened a “modern general store” in the Sunset last September.
“I was growing my career, but it was always in the back of my head to do my own thing. I was like, stop talking about it, let’s do it,” London said.
Plus, London,’s been able to see the bigger picture of making sales: “Weekly and monthly goals have replaced the pressure of daily wins.”
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