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The Small-Business Cost of the Government Shutdown

Plus, what happens next and how to prepare your small business for moments of uncertainty.

On January 25th news broke that President Trump and congressional leaders would temporarily reopen the government, until February 15th, as they continue to debate the budget for the border wall. The announcement came on the 35th day of the partial government shutdown, whose rising impact and trickle-down effect severely affected several trade industries, local and small businesses.

When thinking about a government shutdown, the first thing to come to mind are those most heavily impacted- the over 800,000 federal workers who were furloughed or those crucial employees that were made to work unpaid; still, it goes much further than this.

Various sectors saw the effects of the shutdown, from local breweries and wineries unable to release new products due to the Alcohol and Tobacco Tax Trade Bureau being shut, to local coffee shops and restaurants who are seeing a decrease in regular clientele that had been furloughed. Even all the way through to the construction industry where contractors who rely on federal funds were unable to pay their workers or even at risk of shutting down entire projects.

The Lunacon Construction Group founder and president Patricia Bonilla, earnestly stated, “It’s heartbreaking that people who have invested years developing their companies, place trust and resources into such a powerful entity, like the U.S. government, one whom they expect to always rely on, is now placing their livelihoods at stake. We were at risk of losing not only a 10-year company but also those employed under us, our trade partners, and dozens of individuals whose futures were at stake.”

However, despite all the negativity surrounding the last month, Bonilla looks at the bright side, “…those are the true Americans, the individuals who continued to work, supporting our nation’s infrastructure because they believe in America.”

Although the government has temporarily reopened, this doesn’t necessarily mean the end of our worries. According to the Washington Post, “Because of the shutdown… more than $2.3 billion in small-business contracts are ‘at risk,’ affecting more than 41,000 small firms.”

The majority of the federal workers will be receiving back pay, but the same can’t be said about federal government contractors, a report from the Washington Post stated, “Contract workers, unlike employees of the federal agencies impacted by the shutdown, have not gotten back pay for work lost during shutdowns.”

Despite their crucial contributions these contracted employees may face the harshest reality at the end of the shutdown. Not only are individually contracted employees, such as janitors and security guards affected, but also companies that rely on government funds to pay employees.

This leads to a ripple-effect going from the very top of these companies stemming all the way to the bottom. Employees who have been over a month without pay and who may not be receiving pay soon are not only worried about their finances but are faced with the emotional toll brought forth by financial insecurity.

So how can we ensure that a moment of uncertainty such as this won’t happen again? The answer is we can’t, but what we can do is prepare, so that when a shift occurs, whether it be in the economy, the government or in the industry, we have a plan in place.

As is now evident, small businesses will be and are the most severely impacted during a period of uncertainty, that’s why the most crucial thing to do, even before having a plan in place is to keep updated on current events. This includes keeping track of the status of the economy, of any shifts in government, and any changes in the business’s particular industry.

Having a set business plan is obvious for any business owner, but in order for this plan to be beneficial for a company it must be up to date. As time passes industries change and a business has to be ready to adjust, which is why it’s critical to constantly review your business plan and update accordingly. This should be done in compliance with all departments and employees, which will not only provide distinct points of view, but also expert detail on their separate responsibilities.

Finally, building and maintaining relationships. During times of crisis, the relationships made, whether these be business to business or business to customer, are going to be the defining factors on how your business will be impacted. Holding solid relationships will increase the likeliness of your business’s continued success, through the good times and the bad.

The tacit perseverance and endurance of those affected by the shutdown is evident, have allowed us to peer into the fabric that makes America. Although we’re facing a hard time as a nation, it’s crucial to recognize these moments of solidarity where we reflect on each other and ourselves in order to overcome these instances that need to be dealt with the utmost tenacity and patriotism.

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