After the Shutdown: SMBs Weigh-In on the Showdown (and Who’s to Blame)

Government ShutdownThe rhetoric isn’t over, but the U.S. government shutdown is, for the moment, at an end. With a late-night vote on Oct. 16, the House of Representatives dragged itself across the finish line of a 16-day endurance lap that was meant to test the resolve of the President, the Senate, and — to their chagrin — the American people.

Throughout the process, we heard a lot from politicians about closed monuments and parks, and about the outrage prompted when those resources weren’t available. But what really happened on the ground? What about the business owners that felt the shutdown’s impact?

“The shutdown is about more than national parks and zoos, landscaping and passports,” says Crystal L. Kendrick, president of The Voice of Your Customer. To her, the larger concern about federal offices going dark was “the effect of this shutdown on federal contractors, medical research, and federally funded social services.”

Now, as the dust clears, small-business owners are ready to talk. Here are the stories of several, and what they experienced as the federal government drew the shades for over two weeks in 2013.

Federal Contracts: Hitting Pause on Cash Flow

The Voice of Your Customer works with clients to penetrate niche markets via surveys, focus groups, and media campaigns. Part of its business comes from U.S. government contracts.

“As a result of the government shutdown, our contracts and work assignments were put on hold,” Kendrick says. “Additionally, our invoices were not being processed. What is more is that few federal RFPs have been released since 1 October, so the future workload of federal contractors will be affected as well.”

And the effect ripples across not only Kendrick’s company, either. The freelancers with whom she works will feel a pinch as well.

“We have delayed spending with our contractors and other suppliers,” she says. “We now have idle resources and delayed receivables. We have assigned our staff to other internal activities and we are using other resources to manage our cash flow.”

Bureaucratic Freeze: Licenses, Taxes, and Loans Take a Hit

If you’re a freelancer in need of that new permit, or you’re resolving a complicated tax scenario, the shutdown likely created new problems for you. So says Michael Raanan, president of Landmark Tax Group.

“The shutdown had a significant adverse affect on my business since my tax practice is dedicated to resolving IRS tax disputes,” Raanan says. “No IRS live assistance was available, no paper tax returns were being processed.”

And all those wage levies, tax liens in need of removal, and IRS approval for licenses and escrow issues? All on hold.

Similarly, if you had a loan application in with, say, the U.S. Small Business Administration, you can almost certainly expect that process to be slowed by the backlog caused by the shutdown.

The Finger of Blame

It’s clear that partisan wars are fought by more than one side. But small-business owners and U.S. citizens have shifted in how they answer the question of who bears the blame for the 2013 shutdown.

A Manta flash poll of 1,000 small-business owners allocated blame for the shutdown like this:

  • Congressional Democrats: 12%
  • Congressional Republicans: 22%
  • President Barack Obama: 30%
  • Tea Party: 8%
  • Both Democrats and Republicans: 24%
  • Other: 1%
  • Don’t Know: 3%

By Oct. 13, a Pew Research poll, its findings not confined to small-business owners, showed different results when it came to assigning blame.

  • Republicans: 46%
  • Obama Administration: 37%
  • Both: 13%

Steve Silberberg, owner and head guide at Fitpacking, a company that takes hikers on trips to national parks and forests, placed himself squarely in the mid-October 46%.

“I consider Congressional Tea Party members to blame for the shutdown,” says Silberberg, focusing on those members’ efforts “to defund the Affordable Care Act and convince me that it will place undue burdens on my business. They shut down my business.”

 

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