Small Businesses Suffer From Recent Shutdown

Small Businesses Suffer From Shutdown

Small Businesses Suffer From Shutdown

Small businesses suffer from recent shutdown. Although government employees suffered the most from the recent government shutdown, many small business owners also suffered a hard hit. Any small business that interfaced with in any way with government agencies or government services probably experience some adverse economic effects. These included loss of revenue and lost opportunities, some of which can never be regained.

Here are some specific examples of small business that were impacted by the recent shutdown:

  • Lakeside Group Associates is an executive search firm in Cleveland, Ohio that recruits employees for government aerospace and defense contractors. When the government shut down on October 1st, the company was seeking qualified individuals to fill 25 openings. By the time the shutdown was over 16 days later they were only recruiting for two positions that involved essential projects not affected by the government shutdown. Although this trend should begin to reverse now that government operations have returned to normal, Cindi Smith, the owner of Lakeside Group Associates, has said it could take six months or more for her business to fully recover. She described the economic impact of the shutdown on her business as “a domino effect.”
  • Rene Banglesdorf’s private aviation firm, Charlie Bravo, was similarly affected. This firm, which buys and sells aircrafts for clients like the Department of Homeland Security and the Red Cross as well as some private companies, had three multi-million dollar deals put on hold during the shutdown. All aircraft transactions in the United States are handled by the Federal Aviation Administration in Oklahoma City and, since their office was closed for the 16 days of the shutdown, Charlie Bravo could not make any transactions until the standoff was resolved. Because of this, they lost their entire income during this time period.
  • Ron Putnam can never recover the business he lost during the period of the government shutdown. He runs a mobile event cart with Maui Wowi Hawaiian, a franchise that sells smoothies and gourmet coffee. Putnam had already spent thousands of dollars on supplies including large amounts of milk, bananas and cold-crewed coffee to make smoothies and other drinks he intended to sell from his two carts at San Diego’s Miramar Air Show. When the event was canceled due to the shutdown, he not only lost he revenue that would have been generated by sales at the show but also the funds that had already been spent on supplies. Since the air show represents one of Putman’s most lucrative annual events, he predicts that his revenue for this year may be down by as much as 25%.

Now that the government is up and running again, small businesses can begin to recover from the losses they incurred during the shutdown. However, it may take some a very long time while others may never recoup their losses. In addition, there is the uncertainty factor. The deal that was hammered out only guarantees government funding through January 15, 2014 so many small business owners may be wondering if another shutdown is just around the corner.

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