Photo by Jomar on Unsplash

SurveyMonkey conducted a survey involving more than 2,200 small business owners across the U.S. from January 28 to February 4 to determine the effects of government shutdown on small businesses.

The survey found that 35 percent of the respondents experienced a sales slowdown due to the lack of demand from federal workers in their area.
During the shutdown about 800,000 federal workers were forced to work without pay or furloughed. An additional 13 percent experienced direct loss from government agency contracts.

There were also non-revenue-related effects as well. Around 14 percent of respondents reported a delay in regulatory approval for services or products with an additional 10 percent experiencing restricted access to Small Business Administration loans.

Some business owners reported an inability to access E-Verify to evaluate new employees and contact the Internal Revenue Service for help with tax preparation. Additionally, the shutdown caused low morale at work, a general sense of uncertainty, mental stress affecting small business clients, deferred decision making and a loss in consumer confidence.

The effect of the shutdown was not confined to the Washington D.C. area however, as in the East South Central census division, 25 percent of small business owners reported that the shutdown affected them “a good amount” or “a great deal”. In the end, businesses in areas with high amounts of federal workers were the ones most affected. Small businesses have a symbiotic relationship with the local communities and when the local communities are affected, they are as well.