EVERETT — Local small-business owners are ready to lead an economic recovery, if only the companies they supply and the federal government would pay their bills faster.
Calvin Goings, assistant associate administrator with the U.S. Small Business Administration, and U.S. Rep. Rick Larsen, D-Wash., heard from a dozen small-business owners and entrepreneurs in a roundtable discussion Wednesday.
While there was general consensus that SBA is doing a great deal now to help small businesses succeed, many of the entrepreneurs said they’re hamstrung by slow payments from federal agencies and from businesses small and large, even the Boeing Co.
“A business lives and dies by its cash flow,” said Dallas Meggitt, co-owner with his wife, Judith, of Sound &Sea Technology Engineering Solutions in Lynnwood.
Judith Meggitt said their company has trouble getting payment from federal agencies. While President Barack Obama has touted an executive order that calls for agencies to pay invoices to small businesses within 15 days, she said she hasn’t seen any sign of agencies following that rule.
“What happened to 15-day pay?” she asked.
Meggitt said she’s been waiting for payment on a $1 million federal agency invoice since Dec. 22* and can’t even get an answer on the phone.
“We’re just so frustrated, we don’t know what to do,” Meggitt said.
Goings said he would talk to the Meggitts specifically about the problem with that agency and invoice. He also said it’s incumbent on federal agencies to follow their own contracting and procurement rules, and that’s an area where SBA can help.
Dallas Meggitt also said their 50-employee company, of which his wife is the majority owner, has yet to see any action from the Department of Defense on preferential bids for female-owned businesses. As a result, he said, “we’re precluded from participating on relatively small contracts.”
Goings and Larsen said they would look into the matter.
Even though a narrow majority of the group said they believe the economy is gradually improving, Jerry Murphy, owner of Greenshields Industrial Supply in Everett, said he’s seeing slower payments on his invoices “across the board.”
So does Dale Newman, founder of Industrial Massage in Everett. He said Boeing’s switch from 30-day to 60-day payments has forced him to use his family’s savings and retirement funds to cover the delayed cash flow.
“It really affects a small vendor with an extra 30 days waiting for payment,” he said.
Eric Archer lost his construction sales job. He said he was able to start his new business, BundlePix Action Photography, thanks to six months of training from the Self-Employment Assistance Program that paid unemployment benefits and for development of a business plan with Peter Quist, director of Edmonds Community College’s Small Business Development Center.
Archer said the program was very useful, but when it ended he was cut loose without any resources.
“Starting from nothing is very, very difficult,” Archer said. A longer transition period “would have been helpful.”
Kurt Batdorf is editor of the Snohomish County Business Journal: 425-339-3102, firstname.lastname@example.org.
* This story originally quoted Judith Maggitt as saying her company had been waiting for payment since Sept. 22.