Government Shutdown – Effect On Small Businesses

On October 1st, 2013 the United States government shutdown due to the inability of Congress to come to an agreement regarding legislation for the 2014 budget. For 16 full days some 800,000 United States government employees were forced to go on leave without pay. Federal parks were closed and veteran services were put on hold for the duration of the shutdown. Although federal institutions like Social Security and the Postal Service were largely unaffected by the shutdown, the effect on small businesses countrywide has yet to be fully determined. However, there is a basic understanding of the ways in which small businesses were affected during the government shutdown.

1. Federal Contracts – The Federal government often hires out private businesses for certain projects. Whether it’s construction of a new government building or the building of ships or weapons for the military, any private business that had a contract with the government was affected. In the event that our country’s debt goes into default there’s no telling how many of these contracts will be canceled or become null and void.

2. National Parks – Tourism plays a very large role in the economy of many areas throughout the United States. When national parks shut down the small businesses surrounding them such as bed and breakfasts, restaurants and gift shops all feel the effects.

3. People Out Of Work – 800,000 in comparison to the population of the United States doesn’t seem like much. However that’s almost 1 million individuals who were unable to pay their bills or buy groceries for two weeks which means patronizing local small businesses was out of the question.

The full effect of these recent nationwide events has yet to be determined and unfortunately it is something our country may face again come January 2014. In the meantime there are steps you can take as a small business owner to ensure that your business is minimally impacted by events like these.

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