Hubzone Changes 2023
September 22, 2023
Small Business Lunch October 19th
September 29, 2023
On September 30, 2023 there is a deadline for our Nation’s lawmakers to pass legislation to keep the government operating. If they don’t, then the US Government will largely shutdown and will cease to provide critical services to the US Taxpayers.
What are the Impacts of a Government Shutdown on Small Businesses?
A government shutdown would negatively impact small businesses, a vast majority of entrepreneurs say. Let’s face it, this is not #Govcon’s first shutdown rodeo. We have been faced with this challenge or the potential of this challenge for almost the last decade.
For the Tier 1 government contractors the shutdown is chance to let their consultants get some much needed training without impacting the delivery to the customers. But for the small and micro-businesses supporting the federal government on a cost plus or time and material’s basis the challenges are much greater. They do not typically have the operating revenue to “float” their payroll to keep employees on the books for an extended period of time. They are also operating at much lower profit margins than the large businesses. Most small businesses are forced to have their employees take Leave without Pay (LWOP) or to take Personal Time Off (PTO) to bridge the gap during these events. Unlike the Federal workforce, the #GovCON workforce will in most instances not be paid during the government shutdown period.
There are a few exceptions to this. If your contract is a Firm Fixed Price (FFP) or the functions that you are providing are deemed as essential, then the small business will continue to be paid, and their employees on these contracts will continue their duties and be compensated.
Another impact is the Small Business Administration (SBA), will be unable to process any small business loans. This could create a cash flow issue for businesses looking for financing to keep up with customer demand.
The affects of the government shutdown will stretch beyond the #GovCON community as well. For regulated industries such as craft breweries, they cannot bring new products to market since government agencies will be largely unavailable to approve new products.
