December 22, 2018, marks the beginning of what is now the longest government shutdown in US history. The immediate consequence resulted in the partial or full shutdown of nine executive departments, affecting nearly 25% of government activities and nearly one million federal employees. However, as the shutdown has cleared 33 days without a concrete end date, the impact is beginning to be felt by millions of Americans--and small businesses are at the top of that list.
How is the Shutdown Affecting Small Businesses?
The government offers a wide range of services and programs to assist small business growth, most notably, the Small Business Administration (SBA). On average, the SBA facilitates the distribution of roughly $200 million of loans per day to small businesses. With this agency closed, a significant backlog has accrued, and even after it reopens, delays in funding disbursement are likely to occur.
Small businesses in the District are being hit particularly hard due to the high percentage of companies that are government contractors. According to Small Business Majority Founder & CEO John Arensmeyer, nearly 25% of federal contracting dollars go to small businesses. The inability to acquire new contracts, and often, get paid for work already completed, leaves these contractors in an especially precarious situation.
The shutdown further affects small businesses that rely on federal employees as a large part of their customer base. From restaurants to childcare facilities, small businesses of all types are facing troubling revenue loss through a slowdown of customers during this time.
There’s no denying that many small businesses will be affected by the shutdown, from small setbacks to devastating ones. So, what can you do to help mitigate the damages? Read on for a list of tips.
Use the Opportunity to Review and Trim Your Budget
Review your expenses and identify where you can cut back to save money. Reducing expenses, even temporarily, can help. You may also find overlooked expenses you can cut without sacrificing the quality of your business.
Explore "Going Green"
Investigate local incentives and general cost reductions associated with going green. For example, going paperless or participating in programs that reward green initiatives.
Sell Unused Office Items
Have a storage closet full of furniture, equipment, or office supplies you’ve long forgotten about? Post these items on auction sites such as eBay or use them to barter a trade. Not only can you score some extra cash, you’ll also free up valuable storage space!
Offer Strategic Promotions
Think about the services/products you offer and possible promotions you could extend to your current and potential clients. While it may seem counterintuitive, this tactic could help you stand apart from your competitors and demonstrate support of your community.
Try to identify promotions that cause less stress on your bottom line (such as waiving setup fees, providing incentives for bulk purchases, etc.) yet are still valuable to your customers.
Create Partnerships with other Small Businesses
Explore the possibility of partnering with other small businesses owners. Utilize networking platforms such as meetup.com to find like minded professionals. You may find opportunities for bartering, providing each other discounts, and other ways to create mutually beneficial situations. Networking groups also are goldmines for fresh ideas and viewpoints and can serve as valuable support systems during tough times.
Stay tuned for more information, lists of resources, and a special offer from AdvantEdge as we continue to watch this difficult situation unfold. Please share any stories or tips you have with us in the comments or on social media!