A company that makes solar panels for the Department of Defense has no orders to fill.
A consulting firm recently named one of America’s fastest-growing companies has been forced to tap cash reserves without its No. 1 client: the federal government.
And the acclaimed NoDa Brewing Co. can’t get its latest craft beers on tap and on shelves without approval from a U.S. Treasury agency, whose employees and website are out of commission until the standoff in Washington is resolved.
For more than a week, about 800,000 federal workers have been home on furlough, one consequence of the partial government shutdown that started Oct. 1 as a high-stakes showdown over the federal budget.
But as some small businesses have learned, you don’t have to be a federal worker or operate in Washington to feel the pain of the shutdown.
Osbert Cheung, founder and president of Concord, N.C.-based SBM Solar, said that at this time last year he couldn’t sleep for worrying how he could fill all the orders flooding in. His military-grade solar panels were in great demand: Contractors were purchasing them for use by the U.S. Army and Marine Corps in Afghanistan.
Last year, Cheung had 10 employees with plans to hire more. He had to lay off two earlier this year as a result of the federal budget cuts known as the sequester.
Now, with the shutdown in effect, orders have slowed dramatically – even though some defense personnel have been called back from furlough.
“Today, we really have nothing to do,” said Cheung, who has only 60 percent of the business he had at the same time last year. “It’s really hurting us.”
And even if the shutdown ended right now, he said the backlog would keep federal employees from processing SBM panel orders for a while.
Suzie Ford, who co-owns the NoDa Brewing Co. in Charlotte, N.C., with her husband Todd, said the shutdown is keeping their newest creations from the marketplace.
The Alcohol and Tobacco Tax and Trade Bureau, an arm of the Treasury Department that approves breweries, beer recipes and the wording of commercial labels, closed its doors and website on Oct. 1. Ford hasn’t been able to submit their latest labels – a process that, at its fastest, takes several weeks.
Another one of Ford’s frustrations: Though the agency’s website is down and she can’t reach anyone for assistance, the web page where breweries have to pay their monthly excise tax is still in operation.
“It’s a funny thing,” Ford said. “They’re shut down, but they’re still gladly taking our money.”
The Fords, who are in Denver, Colo., for the Great American Beer Festival, said the shutdown is a hot topic among the brewers there this week. A number of startup craft breweries in the growing field can’t get the approval they need to open their doors.
“You have all your overhead and infrastructure in place,” Ford said as she prepared for the festival, where NoDa’s Coco Loco porter took a top prize last year. “You just want to sell the beer.”
In a rare turn of events, Virgil Higgins, owner of Uwharrie Cabin Rentals near the entrance to Uwharrie National Forest, about 60 miles northeast of Charlotte, said the shutdown has boosted his business.
Though the forest’s trails are still open, the federally maintained campgrounds closed last week, so people are now turning to his business as an alternative.
But though he’s booked for the next two weeks, Higgins is still fearful.
As long as the trails stay open until the normal closing date of Dec. 15, all is well, he said. But if the trails close this fall – his peak season – it’s another story.
“My business would be decimated.”
The U.S. Small Business Administration’s North Carolina headquarters, located in Charlotte, was one of the many government offices shuttered on Oct. 1.
“It’s a confusing time,” said Bill Baker, president of SCORE Charlotte, a volunteer-based business resource for entrepreneurs that has an office inside the now-locked SBA building.
Because SCORE doesn’t depend on government funding, their operations haven’t ceased. But the 70 or so volunteer mentors in the area can’t access office files or even set up a voice mail directing callers to an alternate number.
And every appointment and meeting has had to be rescheduled off-site.
“There are clients trying to get in touch with us through the office, and nobody is there to answer the phone,” Baker said. “We’re getting around as best we can … but I think we’re all anxious for (the shutdown) to be over and done.”
Many small businesses that have applied for low-risk loans probably feel the same way, said Janet Brown, a senior loan officer with Self-Help, an organization that partners with the SBA to give government-backed 504 loans to small businesses for investments in real estate and office equipment.
Though Brown said she’s still collecting and submitting the loan packages to the national underwriting center, they’re sitting in a queue, piling up.
A couple of months ago, Bill Bailey was thrilled to hear his Matthews, N.C.-based consulting company, Rapier Solutions, was ranked No. 115 on the Inc. 500 list of the nation’s fastest-growing companies.
Rapier offers information technology services, program management and financial counseling to private companies and academic institutions across the country. But their biggest client – representing about 75 percent of their business – is the federal government.
For now, that revenue is dried up, Bailey said, and he’s using cash reserves to make up the difference. He’s grateful the Small Business Administration encouraged him to build up savings when he launched the business, with the SBA’s help, in 2002.
“We were prepared for it,” he said. “We can weather this storm for 90 days.”
After that, Bailey said, all bets are off.