I hope 2019 is going well for you so far! It seems we have finally received a reprieve from the government shutdown, even though it may be temporary. Federal workers may have borne the brunt of the shutdown’s effects, but many businesses -- including some of my clients -- were affected as well.
SBA Loans, E-Verify & the IRS
The SBA and E-verify were closed and the IRS had limited availability. The SBA closure interfered with businesses’ ability to get loans processed or consult on a number of business topics. The E-Verify closure prevented companies from hiring certain new employees and significantly slowed the hiring process if a company is in one of the states required by law to use it.
Do Some of Your Clients Work For the Government?
According to Marketwatch, there were about 380,000 unemployed federal workers while another 420,000 worked without pay. Although many of those workers live and work in the area around Washington D. C., a significant percentage (over 20%) come from other states. Businesses that provide goods and services to federal workers and the agencies that employ them were also impacted by the shutdown... grocers, barbers, restaurants, dry cleaners, day care facilities, and coffee vendors to name a few (USA Today).
How Do You Survive a Government Shutdown?
So, another shutdown next month still looms large. There are ways your business can plan for it in the future. Start building up to 3-months’ worth of cash reserves if your business will allow it (Business.com). Prepare in advance to avoid the December-to-January time frame annually for using the SBA as a resource and hiring new employees if you’re required to use E-Verify. Consult your accountant with questions regarding your business taxes (Forbes). Consider extending discounts, providing a longer grace period, or accepting smaller payments from those customers you trust that are affected by the shutdown. Don’t be afraid to request the same courtesy if your business happens to be one of them.
I suspect that many businesses can absorb the consequences of a government shutdown better than individual workers can, but it takes planning. Use these survival tips to help you prepare for government shutdowns in the future.
PS: I enjoyed participating in the Year of the Pig networking event earlier this month, hosted by HQ Greensboro and sponsored by Piedmont Business Capital. My clients range from small startups to well-established companies needing to outsource legal work, and I am grateful that I am able to serve as a resource. You can see photos from the event here.