Ali Ghambari knows what it feels like to have a competitor with almost unlimited resources right next door. In the land of Starbucks, Ghambari owns 10 Cherry Street Coffee House locations around Seattle.
For Ghambari and more than 574,000 other small businesses in Washington state, competition is only one of many challenges they face. The rising cost of health care, recruiting and retention and new regulations make running a small business increasingly difficult.
More than 50 percent of small businesses fail after the first five years, according to the U.S. Small Business Administration. Even so, these companies have a $702 billion economic impact on the state and employ 1.3 million people. It’s a heroic feat, and that’s why the Business Journal has recognized nine Puget Sound-area business leaders who are driving business growth, job creation and community betterment.
COST OF DOING BUSINESS
Ghambari made an $800,000 investment to build out Cherry Street Public House. It’s a new concept in the ground floor of the Weyerhaeuser headquarters in Occidental Square, where he said he pays about $8,000 a month in rent.
Despite the investment, Ghambari says food trucks outside his doors have become one of his biggest challenges.
“When you spend that kind of money, you should be able to tap into the customer base that’s there,” Ghambari said. “To have food trucks come, and with minimal investment, tap into that resource, it’s tough.”
Rachel Yang, chef and owner of Relay Restaurant Group, is navigating competition and real estate costs, as well. Despite a reputation bolstered by three James Beard Award nominations, Yang says it’s a struggle to retain customers and staff, especially when larger restaurants can pay dishwashers $20 an hour.
“We don’t want to be the bad guys,” Yang said. “We want them to make more money and have better ways to care for their families and health insurance.”
Karen Clark Cole, CEO of Seattle-based Blink UX, estimated that her company’s health care costs typically go up 10 or 20 percent each year. She is often renegotiating with her company’s provider, a process that comes with high administrative costs.
“It could break a company, and certainly any company smaller than ours,” she said. “If you can’t provide health care for your employees, you don’t have employees.”
RULES AND REGULATIONS
Earl Overstreet, president of Bellevue-based General Microsystems Inc., said businesses are strapped to meet the needs of the community.
Elected officials recognize how important businesses are — in terms of revenue from B&O taxes — to the structure of the government system, but there needs to be balance, he said.
“It’s a push-pull situation,” Overstreet said. “I see government recognizing the importance of creating a strong business community, and a government that wants to provide the services its citizens are demanding and see business as a resource to help fund that.”
Regulations on a federal level can also present challenges for small business owners.
Nadia Kourehdar, owner and managing partner of Bellevue-based Ark Law Group, specializes in helping homeowners who are struggling to pay their mortgage.
Her business charges a low, flat monthly fee, so she has to keep a high volume of clients.
She’d like to expand her business nationally, but said state bar associations across the U.S. make it difficult.
“Because we have to be such a volume-based business, we are multi-jurisdictional,” Kourehdar said. “There’s not a trans-national support for attorneys who want to help people elsewhere. Being able to expand nationally is difficult and lawmakers don’t seem to understand that.”
DRIVING AROUND THE REGION
Monty Holmes, president of South Lake Union-based Athletic Awards, has reinvented the company to include more than just sports trophies. They do full lines of embroidery, apparel and work for corporate clients including Microsoftand Amazon.
Holmes said part of the challenge he and other retailers face in South Lake Union is traffic congestion and parking. He wants the city to emphasize public transportation “because that’s all we have left.”
“This city is going to end up being a coffee/services industry, where you walk and get your hair cut, but you’re not packing any merchandise out of here, and I’m worried about that,” Holmes said.
For business owners outside the city, however, the region’s systemic traffic issues can provide a growth opportunity. Barbara Bollinger Stoddard says she uses the region’s traffic woes as a recruiting tool. Stoddard has 54 Senior Salons in senior communities from Gig Harbor to Everett, and hires local stylists.
“It’s a big benefit,” she said. “If you have a family and kids at home, we try to structure it so you can get your kids to school and open the salon, and take your last appointment so you can be home when your kids get home.”
The role of a small business within a community often extends beyond hours of operation.
Companies like Senior Salons train stylists to see signs of dementia and help take care of seniors’ well-being.
Athletic Awards’ Fill the Cup campaign brought 40,000 pounds of food to the Queen Anne Food Bank.
Pedro Castro, principal of Redmond-based Magellan Architecture, helps low-income children get involved with youth soccer by paying equipment and league fees through One League for Everyone.
“People think that everyone is Bill Gates because it’s Redmond, but there’s somebody flipping burgers and cutting your hair,” Castro said. “Let the kids be a part of it, have fun and play soccer.”
Taking care of employees – and the future tech workforce – is one of Clark Cole’s passions. She founded a nonprofit, Girls Can Do, to provide youth with role models of diversity in tech.
“We spend a lot of time inviting in and hosting high school programs,” she said. “It’s my highest priority to meet with those girls. My message to them is this: There’s a long way to go, but there are a lot of great examples out there and nothing should get in your way.”