The longest partial government shutdown in the U.S. history – which furloughed 800,000 employees – has ended and the threat of another impasse seems to be over for now.
But in its wake, the 35-day shutdown – which ended on January 25– has affected small businesses in several different ways – from scaling down business sales to halting applications for loans due to closure of the Small Business Administration to downing confidence in the economy.
A CNBC|SurveyMonkey Small Business Survey carried out from January 28 to February 4, reveals that 35 percent of small-business owners across the United States said they had a “sales slowdown” linked to diminished demand from federal workers in their respective areas.
In addition, around 13 percent of small businesses felt a “direct loss of revenue from a contract with a government agency,” due to the shutdown over political stalemate on the issue of funding for President Trump’s proposal to build a wall on U.S.-Mexico border.
Meanwhile, the National Federation of Independent Business’s optimism index shrunk by 3.2 points to 101.2, according to a report in The Washington Post. The report comes amid estimates that the shutdown caused a loss of $ 11 billion including an irrevocable amount of $3 billion.
Those living in the D.C. Maryland, Virginia (DMV) area will remember the shutdown days when the capital looked almost empty at times with much slower business and official activity in the offices.
Building Bridges – An Asian American Chamber of Commerce networking event in Virginia
Photo: AACC
Still it is not just D.C. which has 21 percent of the federal workers, which suffered because the federal employees are spread over the country. For example, in distant Alaska the furloughed employees meant a slowdown in businesses in their areas.
While the furloughed employees will get their paychecks, contractors will have to live with the loss of time of money.
Analysts say small companies and local entrepreneurs will have a hard task ahead recovering from the time and sales lost in some of the key areas of activity linked to hospitality industry, tourism, private sector transport, cafes, restaurants and small stores and services.
“When you stop paying almost a million people for a month, it will have a domino and rippling effect in the economy,” Aaron Klein, a fellow in economic studies at Brookings Institution, said, according to a MarketWatch report.
Theoretically, the way small businesses can recover is a sudden two-fold upsurge in sales of products or services – a prospect that does not happen, as explained by Klein.
The most realistic prospect will mean a gradual but steady recovery over a period of time as proved by progress that took place after the 2013 federal government shutdown under the Obama’s presidency.
For many businesses it will be like rebuilding after a shocking disaster, since the lack of activity hit planning and finances alike from individual workers and entrepreneurs to startup companies and service providers.
So, what are the best ideas that can help affected businesses to get back on the growth trajectory.
1-Plan according to the losses and execute remedial fiscal measures efficiently
2- Seek advice from financial experts and lending organizations
3-Access affordable small loans and resume the loan application processing
4-Coordinate with the state organizations offering any recovery help
5-Network with peers and local chambers
6-Use marketing to speed up sales and expand reach
