Federal shutdown taking big toll on small businesses
The mild weather and cool temperatures of October make it one of the busiest months for rock climbing guides Seth Zaharias and his wife, Sabra Purdy.
This time of year they’re usually leading climbers up massive boulders and sheer canyons in Joshua Tree National Park. Then the government shutdown closed national parks Oct. 1. The couple now spend their day writing refund checks to dejected clients.
In the first week of the shutdown, Zaharias estimates, he lost $2,500 in revenue.
“I’m a little guy,” he said. “I live on $35,000 a year so that is a big hit.”
With the shutdown nearing its third week, small businesses are taking big hits, with no clear sign when the pain will end or what the cost will be. The shutdown has been particularly painful for small firms, many of which can be pushed into bankruptcy with the loss of only a few weeks of revenue, business leaders say.
“I think it’s much easier for a Boeing or some big company like that to absorb a shutdown than a small company,” said Molly Brogan Day, a spokeswoman for the National Small Business Assn., a nonprofit advocacy group.
Businesses with fewer than 500 workers employ about half of all workers in the country’s private sector.
Among the victims of the ongoing Washington stalemate are lodges adjacent to shuttered national parks, real estate agents attempting to close small-business loans, wedding planners trying to arrange ceremonies at national monuments and contractors who work on military bases.
No one has been able to estimate the exact effect of the government shutdown on small businesses, but the U.S. Travel Assn. calculated that the partial government shutdown has cost $152 million a day in economic output because of lost travel-related activity.
“Shutting the park gates is bad for American tourism, family vacations and all the businesses that depend on our parks for staying open to spur the local economies,” said Theresa Pierno, acting president of the nonprofit National Parks Conservation Assn.
The effect of the shutdown has rippled through small companies in several sectors of the economy.
In the San Fernando Valley, the sale of a $1.75-million industrial building is on hold because the federal government has stopped processing a loan through the Small Business Administration, said George Bouzaglou, a Realtor who has been working on a deal to put a furniture manufacturer in the building.
Bouzaglou and his partner Georgina Ghazarian say they and the building’s seller are getting frustrated because they are not getting paid after weeks of trying to lock down the deal.
“It’s making everything hard on everyone,” Bouzaglou said.
He also has a separate home sale that is being delayed by the shutdown because it involves a loan through the Veterans Administration. “Nobody wants to wait for the government in this situation,” Bouzaglou said.
In the outskirts of Yosemite National Park, a one-woman wedding planning business is scrambling to find alternative locations for ceremonies and receptions that were planned to take place among the park’s giant sequoias and ponderosa pines.
“I’m working a lot of hours that I’m not being paid for,” said Roshel Ryan, owner of AddyRose Design, which specializes in outdoor weddings at Yosemite.
She has been able to put together backup plans for three weddings she has scheduled at the park but worries that she will lose future bookings if the shutdown continues. Outdoor weddings at Yosemite are typically intimate affairs with 30 to 70 guests but the price tag can be as much as $28,000, she said.
“Couples will probably think twice about booking in Yosemite because of what has happened,” Ryan said. “I already have couples asking, ‘What if this happens again?’ ”
Joshua Tree National Park, east of Palm Springs, has a reputation as one of the best winter locations for rock climbing in the country, with more than 8,000 climbing routes at all difficulty levels.
Zaharias has a special permit and an insurance policy to lead rock climbing tours in the national park, an enterprise that had been thriving until the government shutdown. Last year, he had 15 tours booked for October. His business is on hold now and he worries about making the December payments for his liability insurance and his special use permit.
Although Zaharias can take his clients to a few rocky outcroppings outside of the park, he said serious climbers travel from around the country and the world to test their skills on the iconic boulders and canyons in the national park.
“It’s absolutely a magical place,” he said. “It’s a giant Dr. Seuss land come to life.”
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