The federal government shutdown has ended —at least temporarily—and government employees will most likely get their back pay. However, small businesses are hurting because they’re not likely to recover their losses in revenues. Unlike the government employees, no one is reimbursing their losses.
How can small businesses recover from this shutdown and be ready in case it happens again?
A Paychex survey shows that at least one in five small businesses was hit hard by the shutdown. In addition to lost income, the shutdown also held up approvals of contracts and loans backed by the Small Business Administration (SBA). The delayed release of business loans derailed expansion plans and start of small businesses as well
John Arensmeyer, the founder and CEO of Small Business Majority is concerned that some federal government agencies may not address the processing back log before there is a shut down again.
The delays in government approvals have even affected businesses that don’t depend on government employees for their revenue. It threw off marketing plans, manpower hiring and manufacturing schedules.
Small business owners are worried of another government shutdown soon because President Trump only declared a three-week reprieve.
So, how can small businesses protect themselves in case of another government shutdown? Here are some ways:
Diversify the customer base.
While the federal government and its workers are generally great customers, businesses should expand their customer base accordingly
Create a “rainy day” or reserve fund.
Small businesses usually have small profit margins but they should set aside some amount to use during the “rainy days.”
Establish sources of extra credit.
Try to establish credit worthiness with banks and credit card providers while avoiding lenders that charge high interest rates.
Establish excellent credit standing with vendors.
Vendors will most likely extend a payment period for business owners they trust.
Support elected officials who stood by small businesses
At election time, remember your pain from the government shutdown and vote accordingly.