How to Start a Business in San Francisco, CA – Useful San Francisco Facts 2023

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Start a Business in San Francisco, CA: When it comes to starting a business, entrepreneurs must look for the place with the most potential. Whether a corporation, sole proprietorship, partnership, or LLC, having a business in San Francisco, CA, is a plus for any entrepreneur. In general, setting up any form of business in California, US, is the initial step to building an international brand.

Entrepreneurs across the globe are interested in starting and expanding their businesses in San Francisco, CA. With an urban population of 3557982 (estimate), the city has a lot to offer to all emerging entrepreneurs. The main reason for this is the economic environment and flexibility of the business structure in California. Like most places in the US, San Francisco, CA also offers business structures for all types of entrepreneurs; no matter what business you want to do, there’s a perfect solution for you. If you want to start limited liability company (LLC) or a corporation, or a sole proprietorship, San Francisco, CA has a proper business environment for all.

How to Start a Business in San Francisco, CA

In this article, you will read about how to start a business in San Francisco and why you should choose San Francisco to start and run your business. We recommend you check below the important facts about San Francisco, CA; these might help you.

San Francisco, CA Household Income Statistics

San Francisco Median household income119136 USD
San Francisco households with dual income earners62.4 %
San Francisco households $150K+ Income41 %
San Francisco households $100K+ Income56.2 %
San Francisco households $100-150K Income15.2 %
San Francisco households $75-100K+ Income8.7 %
San Francisco households $50-75K+ Income9.8 %
San Francisco households $35-50K+ Income5.9 %
San Francisco households $25-35K+ Income4.6 %

San Francisco, CA Education & Labor force Facts

San Francisco residents with a bachelor’s degree (or equivalent)35 %
San Francisco residents with at least a 4-year degree58.7 %
San Francisco residents with a graduate degree23.7 %
San Francisco residents with a high school diploma but no more11.6 %
San Francisco residents with less than high school education11.4 %
San Francisco residents with some college but no more18.2 %
San Francisco residents with a Bachelor’s degree or higher (STEM fields)52.4 %
San Francisco households that own (rather than rent) their residence38 %
San Francisco residents 16 and older in the labor force71.2 %
San Francisco residents unemployed4.7 %

San Francisco, CA Demographics

San Francisco residents aged 0-98 %
San Francisco residents aged 10-196.9 %
San Francisco residents aged 20-2917 %
San Francisco residents aged 30-3920.8 %
San Francisco residents aged 40-4913.5 %
San Francisco residents aged 50-5912.2 %
San Francisco residents aged 60-6910.7 %
San Francisco residents aged 70-796.4 %
San Francisco residents aged over 804.5 %
The average size of resident families in San Francisco, CA3.12
Estimated population per square kilometer in San Francisco, CA7199
San Francisco, CA urban population (estimate)3557982
San Francisco, CA municipal population (estimate)874784

Now that you know what makes San Francisco of California good for business, let’s get started with the exact steps on how to start a business in San Francisco.

How to Start a Business in San Francisco, CA

Starting a business in San Francisco, CA, needs planning, financial decisions, legal procedures, and a handful of other things. Be it a corporation, sole proprietorship, partnership, or LLC in California, you must go through the following steps. These steps are general steps. They are subject to change depending on the structure of your business.Generally, starting a Limited Liability Company is easy to form. Read our guide on how to start an LLC before you start your own business. Here are the steps to set up your business in San Francisco.

Step 0: Decide on What Business to Start

Decide on What Business to Start

This is the first thing you work on, the type of business you want to start in San Francisco. Depending on that, you need to make your business plan. Apart from the legal documentation and process, you must include the following points in your business plan,

  1. Through market research on demand trend
  2. Complete Budget plan – funding your business. If you’re planning to start an LLC, then take a look at the cost of LLC
  3. What competitors are doing
  4. SWOT Analysis – check what your Strengths, Weaknesses, Opportunities, and Threats are
  5. Your targeted buyers

Once you have the entire plan with you, you can continue working on the legal structure of your business. LLCBuddy will guide you through the legal process of forming an LLC for your business. It’s very likely that you have already done this step 0, so that we won’t go deep into this step, let’s move to step 1.

Step 1: Choose Your Business Structure

Choose Your Business Structure

The very first step after you decide on what type of business you want to start is to choose what type of business structure you want to form. You can form an LLC, a sole proprietorship, a corporation, or a partnership. Each type of structure has different rules and regulations. For example, if you want to start a California LLC, there are different types of tax and fee structures. An LLC formation is similar to forming a sole proprietorship. On the other hand, forming a corporation is much more complicated. The tax and fee structure is completely different in corporation formation.

Step 2: Name Your Business

Name Your Business

The next step in forming a business is to give it an appropriate name. Having a business name is not so easy task. You cannot pick a random name for your company. One has to follow proper naming guidelines before they name their company. Besides, before you settle a name, you must check if the name you are looking for is available to use. You can visit the official government site of California to do the California LLC name search before you pick the available name. Below are some of the naming rules you need to follow,

  1. You cannot name your business that has words or phrases like Bank, University, Government, or anything that can confuse people with a government sector. 
  2. If you are forming an LLC in California, then you must include words like “LLC,” “LC,” “LLC,” “Liability Company,” and “L.L.C.” If it is an LLP, then you must include “LLP” in your business name.
  3. The name should reflect the nature of your business. Any name that can confuse people should not be picked.
  4. You can check if the name of your company is available. Through the business name search process, you can search if the desired name is available for use or not.
  5. You can reserve your business name for a certain time before you form your business in San Francisco, CA by filing a name reservation application.

The above-mentioned points are basic naming rules that all businesses have to follow while naming their company. As mentioned above, these rules are subjected to change depending on the structure of the business.

Step 3: Get a Registered Agent

Get a Registered Agent

A Registered Agent is a person who receives all types of legal and official documents on behalf of the business. Whether a suit against your company or formation-related documents from the state, a California LLC Registered Agent is responsible for receiving these documents at his/her official address. In general, anyone who has the right to conduct business in San Francisco can be a registered agent. However, there are some requirements to becoming a registered agent.

  1. The person has to be 18+ years of age.
  2. Must be a citizen of the California
  3. Must have a physical street address in the California
  4. Must have legal rights to conduct business in the California

Anyone who fulfills the requirements can be a registered agent. Also, anyone from the company, your spouse, any relative, or yourself can be a registered agent. But, it is recommended that you hire a professional registered agent to look after your documentation. You can choose from the best LLC services that also offer registered agent for LLCs.

Step 4: Register Your Business

Register Your Business

The next step is to register your business under the Secretary of State, California. The Articles of Organization (or certificate of incorporation) of your company should be submitted online, by mail, in person, or by fax to the California SOS. You need to pay the state filing fee either by Credit Card or by check to the SOS while registering your business in the San Francisco, CA. Your California LLC articles of organization should have the following details about your business

  1. Company/Business name, address
  2. Registered Agent Name, address
  3. Member-managed or manager-managed (in case of LLC)
  4. Type of business

Depending on the type of business structure, you may have to add some more information to the formation document.

Step 5: Write the Operating Agreement

Write the Operating Agreement

An operating agreement is a document that has all the structural information of your business. In most states, it is not mandatory to create an operating agreement. However, it is highly recommended to have one as an internal document. This document records information such as,

  1. About Business
  2. Members and management
  3. Capital contribution
  4. Profit Distribution
  5. Change of membership
  6. Dissolution

In future, if any member wants to leave the company or you want to dissolve the business, then the California operating agreement has everything recorded, from clauses to contributions.

Step 6: Obtain EIN

Obtain EIN

EIN or Employer Identification Number is required to file taxes, open a business bank account, and if your business has employees. EIN can be obtained from IRS. It is a 9-digit number similar to Social Security Number. However, EIN is different from SSN. It is solely used for business purposes, especially for general tax filing. You have to fill out the form and submit it to the IRS website. It does not cost you anything to obtain EIN.

Step 7: Get Business Bank Accounts

Get Business Bank Accounts

Once you obtain the EIN for your business, you are free to open a business account in the US. Having a US business bank account can ease your business transactions in San Francisco, CA. It increases your business credibility and liquidity. It will also be helpful for business loans.

Step 8: Create Your Business Website

Create Your Business Website

Business websites are as important as your business structure. It is necessary to have a catchy business website with all the information regarding your company. Along with the website, you need some more things. Things such as logos, business cards, business emails, domain names, and social media accounts are needed to promote your business. You can hire a professional business service to get all of these services under one roof.

Other Things to do After Starting Your Business

  1. Once your company is set in the San Francisco, California, you need to file your taxes and apply for licenses (if needed).
  2. Apart from the license and permits, you need to get insurance for your business. Such as General Liability Insurance, Professional Liability Insurance, and Workers’ Compensation Insurance are some of the insurances you need to get if you are about to start an LLC.

Important San Francisco Stats for Starting a Business

Before you start a business in San Francisco, it is required that you know some facts about the city. Following are some of the stats to consider before starting a business.

Education & Employment

San Francisco has a diverse population that comes from various educational backgrounds. There are students who haven’t finished their high-school education, whereas there are people who are more than just college graduates. Check the table (Education & Labor Force) for detailed data. From the data, it is clear that the city has enough educated and skilled people who can contribute to the labor force.


As we talk about the urban population density, the young population percentage in the city is approximately 17 (people in their 20s) and 20.8 (people in their 30s). This means that having any business that is new and tech-based might be profitable. The median age of the population in the city is 38.3. On the contrary, if anyone wants to start a business that is related to any old-age service, such as caregiver, primary old-age support, or something of a similar sort, then San Francisco has approximately 4.5 (people in their 80s and above) percent of old people. Check out the table (Demography) above for more information.

Real Estate

Another important factor to mention about San Francisco is the home value of owned properties. The average value of owned houses is 1155764. Also, the percentage of people living in their own houses is 38. This reflects the real estate market of the city. For a metropolitan city, this is a considerable number.


It is inevitable that living in a big city is different from living in a town or a comparatively smaller city. It directly affects lifestyle and health. It is obvious that having health insurance is important, no matter which city or region you are residing in. But there are people in San Francisco who still do not have health insurance. The rate of people not having health insurance is 3.6. This depicts the lifestyle and overall health demography of San Francisco. As you plan to start your business in this city, you must consider this stat as well.

Income & Lifestyle

The income pattern of the people in this city is given in the table (Income) above. In San Francisco, a part of the population has a dual family income that reflects a better standard of living. As in, people have more than one source of income. The table above shows the income percentage of various slabs.

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Reasons to Start a Business in San Francisco

San Francisco offers a bunch of business-friendly services for entrepreneurs. A proper business environment, skilled labor, tax advances, deductions, and much more are awaiting if you are interested in starting your business in San Francisco. Here are some of the reasons,

Stable Economic Growth

San Francisco or any other city in California has stable economic growth and an environment that helps any business to grow successfully. The economic structure of California shows not only balanced but also a sustainable condition of economic growth, which in turn triggers the businesses to flourish in the state.

Minimize Personal Liabilities of the Entrepreneur

If you’re considering starting an LLC in San Francisco, then it will be your best choice. An LLC protects your personal assets and minimizes your personal liabilities. This is one of the many reasons why having an LLC in San Francisco is a wise choice. Also, if you are opting for an LLC, the tax deductions will be more than having a corporation.

Federal and State Tax Relaxation

There is a series of federal taxes that an entrepreneur has to pay when operating a business in the US. Depending on the state your company is located in, the state taxes are being imposed. For an LLC, both of these taxes are much lower compared to other business structures. Along with tax impositions, some tax deductions (state-wise) lower the filing fees and other government charges. Check out the California LLC tax structure to know more about the tax structures for LLCs in the state.

Government Incentives for Entrepreneurs

Federal and state governments in the US ensure that entrepreneurs get a proper business environment in the state or city they are operating their business. The government provides a few incentives to the business holders in California or any other state. That means if you are operating any business in San Francisco, then California State will provide an incentive for creating jobs, contributing to the state’s GDP, and/or balancing the state’s tax structure.

Low Corporate and Other Business Taxes

Corporations and other business structures (except for an LLC) are liable to pay a corporate tax in California. Also, there is a Sales Tax that all businesses, including LLCs, have to pay. However, the rate of taxes is very low. Besides, as the businesses receive incentives, the tax burden gets lower.

Skilled Labour & Quality Manpower

In San Francisco, it is easy to hire employees for your business. They are not only skilled but also well-educated to help your business grow. As mentioned above, the 71.2 is the percentage of labour participation. Hence, it is clear that having a business in San Francisco will make a lot of difference to the existing labor force.

Demand for New Market and Industry

In San Francisco, California, there is an uprising demand for new industries and new markets. Entrepreneurs who are willing to start a business in any of the cities of any state are given enough opportunities to stay in business. Business licensing, tax deductions, incentives, and relaxation of business taxes are some of the benefits that encourage start-ups and budding entrepreneurs to start their own businesses in San Francisco.

If we follow the US Data, the median value of commute time for the residents to their work is approximately 33.3. If you are starting a business here, you must keep in mind that commutation can be a point to consider.

Intellectual Property Protection

The US government receives roughly more than 1 million applications for IPR every year. The federal government makes sure that there is no infringement of any patent or property rights. It does not matter which city in which state you are running your business. The rule of Intellectual Property Protection is the same for all. If you have a foreign business in the US, then you might get more benefits under the IPR act.

Other Benefits

San Francisco (aka ) is ranked at 1 in terms of importance. Apart from the above mentioned reasons, there are some other benefits that businesses enjoy in San Francisco. For example, technological advancement, a stable political environment, renewable resources, sustainable non-renewable resources, and some more benefits make things easier for entrepreneurs to start and run their businesses. According to US Data, the percentage of young people in San Francisco is 20.8. Hence, it would be great to start a business that is related to tech here as you might get a good number of clients.

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Why Start Business In San Francisco California

Whether you are a local or an outsider looking to start a business, San Francisco California is one of the most exciting and dynamic cities to do business in. The city is home to many notable businesses including Twitter, Square, Levi Strauss, and Gap. In addition to these businesses, you will find numerous other well-known companies and startups located in San Francisco.

Aside from the many opportunities for investment capital available on the West Coast, the city also provides a highly business-friendly environment. The city is home to the Renaissance Entrepreneur Center, a center for the training and support of entrepreneurs, and the Office of Small Business provides assistance to small businesses.

One of the most interesting aspects of the city is the diversity of cultures. The city is home to hipsters, nerds, and corporate titans. If you are a tech entrepreneur looking to start a business, San Francisco will help you achieve your goals. Its innovation and creativity make it a top destination for startups. Known as the Innovation Capital of the world, San Francisco is home to more than 1900 technology companies.

If you are looking to start a business in San Francisco, you will need a Business Registration Certificate. This certificate is issued by the City of San Francisco’s Office of Treasurer & Tax Collector. Applicants must fill out an electronic signature application and pay the required fee. The Business Registration Certificate fee is waived for tax-exempt nonprofits and landlords with income from housing co-ops.

If you are considering starting a business in San Francisco, you may want to look into the city’s First Year Free program. This program is sponsored by the Office of Economic and Workforce Development and spearheaded by the Office of the Treasurer & Tax Collector. You can find information about this program on the San Francisco Business Portal.

One of the best ways to start a business in San Francisco is to open an online retail store. This is a great way to earn money while also giving you a chance to sell unique products around the world. You can sell books, handmade jewelry, and other unique items. You may also choose to offer discounts on items for kids, including kids clothing, books, and other items.

Another good business idea in San Francisco is to open an art store. You can sell art supplies, stationery, and other art items. You may also offer classes to locals and tourists. You can rent out extra rooms, too. This is a great way to earn extra money, especially if you have the equipment to do so.

You can also start a transcription service. This business is a great way to earn money, as well as find employment in the legal industry. You can also get a job in the medical industry. In addition to starting a business in San Francisco, you will need to get additional permits to operate the business. You will also need a Business Account Number from the Office of the Treasurer & Tax Collector.

FAQ About San Francisco, CA

How much does it cost to start my own business in San Francisco, CA?

A successful company may be launched in San Francisco. In addition to having a cheap cost of living, it is also quite inexpensive to establish a company. Depending on the form of company you desire, creating a new one might cost anywhere from $100 to $70, although starting an LLC is usually more expensive.

How much does it cost to start a small business in San Francisco, CA?

Depending on the kind of company you’re beginning in San Francisco, CA, there are different startup costs. Restaurants, coffee shops, and bars are a few of San Francisco’s more well-liked small business concepts. In San Francisco, CA, the price to form an LLC is $70.

Do you have to renew LLC Every year in San Francisco, CA?

LLCs are a great way to start your own business. However, you have to renew your LLC every year. If you are in San Francisco, CA, you want to make sure you do so before the deadline. You must renew your LLC before the deadline to avoid any discrepancy.

How can I create a small business in San Francisco, CA?

San Francisco, CA is an amazing city with a lot of potentials. If you are going to start a small business in San Francisco, then try a restaurant or food business. San Francisco, CA is also desirable for businesses like a freelance writer, consultants, home-baker, and so on.

How much does it cost to create an LLC in San Francisco, CA?

How much it will cost to form an LLC in San Francisco, CA, depends on a number of variables. It may be influenced by the quantity of members, the nature of the organization, and the yearly fees. San Francisco, CA LLCs typically cost $70 to form.

How do I start a LLC in San Francisco, CA?

To form an LLC in San Francisco, CA, you must first choose a name, submit the necessary paperwork to the Secretary of State, and then receive an EIN. Launching a company and obtaining a license are the following steps. Your LLC may be launched after they are finished.

Do I need insurance for my LLC in San Francisco, CA?

LLCs in San Francisco, CA, need insurance. In general, it is a good idea to get insurance for your LLC. Some insurances, like workers’ compensation, are a must if your LLC in San Francisco, CA has employees. You must check with the California SOS portal for more information.

How much is business insurance in San Francisco, CA?

The cost of business insurance in San Francisco, CA varies depending on the type of business you have, the size of your company, and the nature of the business. A small business with less than 10 workers, for instance, can spend as low as $1,000 year for general insurance.

How much tax does an LLC pay in San Francisco, CA?

LLCs do not have to pay income tax on their company profits in San Francisco, CA. According to their individual income, LLC members are all required to pay income taxes. The other taxes are the franchise tax, employment tax, and sales tax.

What can I do with an LLC in San Francisco, CA?

You are able to launch any company in San Francisco, CA, if you have an LLC. Create a solid marketing strategy, secure funding for your startup, and manage your business in San Francisco, CA.

Do I need a registered agent for my LLC in San Francisco, CA?

A registered agent must be chosen if you wish to form an LLC in San Francisco, CA. It might be a friend, family member, spouse, boss, colleague, or even you. But you must choose a registered agent for your LLC.

Is LLC free in San Francisco, CA?

No, LLCs are not free in San Francisco, CA. To form an LLC in San Francisco, CA, you must pay the LLC filing fee charged by the state. Also, there are some taxes one has to pay to run an LLC in San Francisco, CA.

Is it hard to start a small business in San Francisco, CA?

Some residents of San Francisco, CA may believe that it is difficult to start a small company here. But the city is full with tools to get you going. One of the greatest is the San Francisco Chamber of Commerce, which provides a number of services to assist entrepreneurs.

What is San Francisco, CA most known for?

San Francisco, CA is most recognized for its booming economy. This will be a terrific choice for you if you like doing business and are eager to launch your own company in this city. You may simply establish your own company in San Francisco, CA.

Is San Francisco, CA good for startups?

It should come as no surprise that San Francisco, CA, is among the top cities in the nation to start a business. More than 1,000 businesses are based in the city, and San Francisco’s tech industry is flourishing, supporting more than 100,000 employment. San Francisco is also a great place to reside.

How do I apply for a LLC in San Francisco, CA?

The process for applying for an LLC in San Francisco, CA is not so complicated. You need first to file paperwork with the Secretary of State and submit LLC formation documents. Then you need to go to the County Clerk and file paperwork (if needed).

What business can I start with $1000 in San Francisco, CA?

In San Francisco, CA, $1000 may be used to launch a variety of company concepts. You may launch a company that sells webpages. companies that do internet sales are another. Using an excellent name as your company name, you might launch a computer and technology-related firm.

What are 5 things you need to start a business in San Francisco, CA?

When you want to establish a business in San Francisco, CA, you need to have these 5 things ready: a. a strong business plan; b. a name for your company; c. funding; d. any necessary permits and licenses; and e. a marketing strategy or plan.

What is a livable salary in San Francisco, CA?

Around $26,000 is the minimum livable wage in San Francisco, CA. A livable income in San Francisco would be any amount between $40,000 and $60,000. You may need to make more money if you wish to live a luxurious lifestyle in this city.

How fast can I create an LLC in San Francisco, CA?

An LLC may be formed quickly and simply in San Francisco, CA. To complete the process, all you have to do is submit the required paperwork to the Secretary of State and pay the filing fee. It’s fantastic that the procedure may be finished in as little as one day.

What is the best area in San Francisco, CA to live?

Towns and villages are less costly than cities. Make sure to keep the cost of living in mind while deciding where to reside in San Francisco, CA. When choosing a location for your company, it’s also critical to confirm that it is effectively linked to the rest of the city.

How do you set up an LLC in San Francisco, CA yourself?

Creating an LLC on your own is possible if you reside in San Francisco, CA. The application must be completed online at the Secretary of State’s website. As well as the information for the registered agent, including your name, address, and the kind of LLC.

Why businesses are moving to San Francisco, CA?

Numerous enterprises have relocated to San Francisco, CA, in recent years. The primary cause is the city’s expanding economy. The industry and service sectors have recently made enormous contributions to the state economy. As a result, companies are keen to relocate to San Francisco.

What business are moving to San Francisco, CA?

Some popular businesses like restaurants, hotel businesses, designer apparel businesses, and so on continue to move into San Francisco, CA. As the economy is growing, the chances of having big brands in San Francisco are growing too.

What are the benefits of a LLC in San Francisco, CA?

LLCs in San Francisco, CA have a lot of benefits. Firstly, it is less complicated than a corporation, it is cheaper, and there is no double-taxation in LLCs. Hence, if you have an LLC in San Francisco, CA it will be beneficial for your business.

How long does it take to register a business in San Francisco, CA?

Start-up businesses might choose San Francisco, CA. San Francisco just takes a day or so to register a company. The name, location, and contact details of your company must be provided. The officials, directors, and members of the firm must also be included in your submission.

Why is San Francisco, CA so popular?

San Francisco, CA is a popular city for many reasons. Even if it is a business city, San Francisco has rich art and culture. Besides, in recent years, the economy of the city has become incredibly strong. It is becoming popular for being one of the best cities for startups.

What is the easiest business to start in San Francisco, CA?

The easiest business in San Francisco, CA is a food truck business. The food business is the one that is most popular and most common in CA. You can get a truck on rent or buy it and get started. Fast food business is the easiest to start in San Francisco, CA.

Do LLC pay taxes in San Francisco, CA?

LLCs are exempt from paying state taxes in San Francisco, CA as a company. Depending on the owner’s personal tax bracket, they may be subject to federal taxation based on their personal income.

What policies do I need for a small business in San Francisco, CA?

If you own a small company in San Francisco, CA with a small staff, you are required to have a few employee-related regulations. Workplace health and safety, employee behaviour, leave and attendance, equal opportunity, and other topics are a few of them. The most typical policy is one regarding health and safety.

Is San Francisco, CA LLC friendly?

An LLC is advantageous in San Francisco, CA. The state provides a broad variety of advantages for businesses, which is why. It provides startups with tax advantages, quick company funding, employment advantages, and other perks.

How much does it cost to get a tax ID number in San Francisco, CA?

You may be curious about the cost of obtaining a Tax ID number if you reside in San Francisco, CA. The IRS issues Tax ID numbers, which are nine-digit numbers used to identify a person or corporation. It is available without cost.

In San Francisco, CA What can an LLC write off on taxes?

In San Francisco, CA, an LLC can write off a few taxes. Some of them are business insurance, office supplies, professional travel or use of a car, home office expenses, and many more. Check with the local tax office to know more.

What is better than an LLC in San Francisco, CA?

In San Francisco, CA, a single proprietorship is preferable over an LLC since it will be less expensive to form one. If you compare an LLC to a sole proprietorship in San Francisco, CA, an LLC can be a superior option.

Why you shouldn’t move to San Francisco, CA?

Make sure moving to San Francisco, CA, will benefit both you and your company. You shouldn’t relocate to this city if doing business there would cost you more money due to the city’s regulations.

In Conclusion

Starting a business in San Francisco is not only easy but also profitable. A large portion of the US and even people from other countries are registering their business in the US for intercontinental brand building. Besides, California has a sustainable economic atmosphere that is enough to encourage newbies to start and run their businesses in San Francisco, CA.

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