The fiscal year for the Issaquah Chamber of Commerce starts April 1 and during its first five months, Issaquah has lost just as many businesses to closing or relocating as it has to all of last year said Kathy McCorry, executive director of the Issaquah Chamber of Commerce.
McCorry believes there are several factors that have influenced the slowdown in the city, including common and expected causes.
According to McCorry, some of the closures are natural given the fact that 50 percent of all start-up companies will fail within the first three years of business.
“When we position ourselves to encourage innovators, entrepreneurs, home-based and start-ups it is natural that there will be a higher percentage of closures compared to communities that cater to mid-size companies and recruitment of established companies,” McCorry said.
Without having a proven track record or funding to fall back on compared to corporate giants, it’s only a given that something might happen to push a small business out of the market, but one interesting trend McCorry is seeing with Issaquah businesses is how commercial property is being used.
Despite the fact that Issaquah is a destination location and many people are choosing to call the city their home, businesses, on the other hand, are looking at bigger cities like Bellevue for its infrastructure.
The commercial property in Issaquah is predominantly small office spaces under 1,000 square feet. As businesses grow and hire more employees they will need larger spaces. Issaquah has not kept pace with cities like Bellevue and Redmond preparing for growth spurts McCorry said.
“I spoke with three local businesses today alone that also have offices in Bellevue,” McCorry said. “It is those businesses that are dedicated to Issaquah that help us continue to thrive. Unfortunately, some companies find it easier and more cost-effective to simply move their business to a neighboring city.”
McCorry said the trend is slowly going to change.
“We do have a new office building being built with opportunities to lease large spaces,” McCorry said. “We will also have some commercial properties become available again when Costco completes its campus and moves some of its operations back onto their property.”
According to McCorry the spaces Costco vacates will be older and more affordable, which bodes well for young, growing companies and startups.
McCorry went on to say small businesses need a supportive environment in which to grow and thrive, while large companies are continually being wooed by other “more affordable” states. Trying to please both sides, small business needs and large companies can sometimes put cities in tight positions in terms of development and growth. McCorry said the state and cities should be cognizant of this when looking at the overall health of communities.
McCorry is more concerned about the future economy slowing down and what impacts that could have on Issaquah and Issaquah businesses.
“As the economy continues to slow, all communities will experience business closures to some degree. However, an even greater danger may be if the businesses that are expanding right now decide not to,” McCorry said.
Although McCorry doesn’t believe that will be the case, she still thinks it’s worth keeping an eye out for, especially since it’s the small business owners who feel new taxes the most.