Government shutdown: How to prepare and mitigate the impact

With the federal government shutdown, even outside of Washington, D.C., small businesses are struggling. Government contractors lose money (almost 25% among them are small businesses), the SBA stops processing loans, tourism is affected (national parks and monuments closed), etc.

Unlike federal employees who are paid back when they return to work, America’s small business owners must overcome the costs themselves, access the necessary financing and, in many cases, rebuild their businesses. their profession.

In this article, the second in a two-part series on government shutdowns and their impact on small business (catch up with part one here), we’ll look at how business owners Businesses can prepare for potential closures and mitigate the impact.

Here’s what you need to know to prepare for and minimize the impact of the government shutdown on your business.

If you are a government contractor

Contractors dependent on federal government business were perhaps hardest hit by the shutdown. But there are some steps they can take to prepare and recover once Uncle Sam returns to work. Here are some questions to ask and best practices to follow:

• Can you continue to work under a contract?

  If you’re working on a government contract, find out if any impending outages could affect work. Will the agency issue a “stop” order? If so, all work must stop. Whatever happens, don’t stop working until you’ve received a clear termination notice from your agency.

• Neat and quick arrangement
  Even if a cease-and-desist order is not issued, contractors face another challenge – access to resources. Outages mean reduced agency staff, closure of facilities, and denied access to data, making it impossible to resume work. Try to prepare for this situation by gathering as much information about the project as possible before government officials know the details. This is also the time to evict and settle any outstanding bills.
• Request a contract extension
  In the event of an outage, you may be allowed to postpone your contract with a reason to extend it until the job is done, if the job isn’t coming, tap for a job.
• Get paid

  The next big question is whether you get paid. There is no clear answer here. It all depends on the type of contract (fixed price or cost reimbursement), the type of work being done, and where the money is coming from. If you receive a cease and desist order, refer to your contract. Is there an option to recover any lost costs for fixed price contracts or those that are already funded? Contact your procurement contract officer to find out what’s involved. If you experience financial hardship during the shutdown, consider bill sponsorship. Fundbox allows you to withdraw based on your outstanding receivables, sign up in seconds and get cash as early as next business day.

• Consult a lawyer

  Since the threat of outage seems to have become part of the contract’s life, you should consult a legal counsel who specializes in federal procurement law to understand your rights.

• Keep a trace on paper
  Whatever happens, keep strict records of the costs incurred as a result of the shutdown and document all communications you’ve had with the government so you can support any school. whatever you take to recover costs.

If you are applying for an SBA loan

The SBA closed completely during the shutdown, slowing down SBA’s processing of hundreds, if not thousands, of loan applications. Shutdowns are unpredictable: they can last days or weeks.

You may not have to wait that long. If you need faster funding, consider alternatives like Fundbox. We offer hassle-free financing, paperwork and review beyond your credit score to help you make funding decisions. Payment procedures Credit Fundbox™, and see for yourself.

If you are in the travel business

Outages can have a serious impact on tourism, especially for small businesses located in or near national parks and monuments.

If you own a business that relies on tourists, what options do you have during the downtime?

Before shutting down, think about how you can get customers to continue their travel plans. Hotels and B&Bs may offer “special offers for shutdowns” during closures and encourage “reopenings” after closures. Others may diversify or suggest other sightseeing alternatives unrelated to the affected parks.

Try to communicate regularly with your customers. Let them know how and if the outage will affect your business, what you’re offering instead, and give them a reason to come back when it’s all over.

Keep an eye on cash flow forecast, and be prepared to minimize any potential impacts.

If Military is Your Client

Is your business near a military base or on a base? If DoD employees get too confused, this can affect how much they spend on your business. Show that you are with them, offering promotions or other incentives to attract visitors. Many establishments do not allow you to advertise locally, so you need to rely on word of mouth.

Depending on your business and if it makes financial sense, you might also consider offering the service for free or at a reduced price during the downtime, then refunding it once the payment has returned. element comes into effect.

If you are renting

Electronic verification, the federal government’s employment eligibility verification system shuts down during the shutdown. Even if the system is down, employers are still required to complete Form I-9 for all new employees. However, you will not be able to create a case in the E-Verify system (you must do so within three days of the employee starting work).

During the recent outage, USCIS paused this three-day rule, but employers are required to file an I-9 once the system is back online.

Keep a good record of new hires made during the outage, and learn the timeframe for entering and creating instances in the system once the outage is over.

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Read part one: 5 ways government shutdowns hurt small business

5 ways government shutdowns hurt small business