Navigating a Government Shutdown: Protecting Small Businesses Amid Uncertainty

What if your small business was directly affected by a government shutdown, especially if you're heavily reliant on government contracts? Take a journey with us as we shed light on the possible disruptions, exploring strategies that can be employed to protect your interests. We anchor our conversation on the importance of understanding your funding sources, nurturing a robust relationship with your contracting office representative, and maintaining transparent, forthright communication with your team.

Imagine facing delayed payments, a dwindling customer base or navigating the labyrinth that is obtaining permits during a shutdown - daunting, right? We dive into these potential repercussions and more, discussing practical solutions like a continuing resolution and the impacts this could have on your staffing and other departments. The key takeaway from our discussion is the critical need for small businesses to stay informed and prepared for any eventuality, underlining the importance of adapting and thriving even in the face of uncertainty. Tune in for a riveting discussion to arm yourself with the knowledge necessary to protect your business during a government shutdown.

• Hosted by: Terrell Cummings & Devon Florczak
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Transcript

Speaker 1: 0:18

Hello and welcome back to the Country Intelligence Report. We are your hosts, spencer Bentley, tyrell Cummings and Devin Florzak. Today we're going to be covering something that's pretty contemporaneous A little bit of a departure for us but has direct impacts, obviously, on what we do and the client that we serve, and that is the government shutdown. The government shutdown that never should have been, but here we are. I'm sure a lot of businesses, both large and small, have a lot of questions around this, do we? We just thought that we'd discuss it and see what insights we may be able to share with you all on how the shutdown could impact small businesses in particular. To begin, obviously, in light of the potential shutdown I just want to pose to our group here, what immediate impacts can small businesses, particularly those that rely on government contracts, can expect to encounter? How can they best prepare for these disruptions? Obviously, this is new territory for us, but I'm just interested to get your thoughts on where you think small businesses may be vulnerable and how they can prepare themselves.

Speaker 2: 1:46

Yeah, and I can start here. I think the first place to start is trying to figure out where your funding is coming from as a contracting business. I think in the last shutdown there's a lot of talk, especially during code. There's a lot of talk about essential versus non-essential contracts. The basis that I think that comes from is whether or not funds have been appropriated for that type of work or not from Congress, what that means, at least from what I know.

Speaker 2: 2:21

Again, I've done very little research about this and I've only listened to the news and read a couple of blog posts. But appropriate funding is funding that Congress at least to me that sets aside for the year and essentially draws the line between contracts that need to work and need to go on whether or not the government is shutting down or not, versus contracts that can go on, pause or hold if there is uncertainty towards funding for the next year. I think that's really the first step is trying to figure out where your funding is actually coming from and coming with that is having a good relationship with your contracting office representative and laying the lines clearly and going to them saying, hey, if this shutdown happens, are we still funded or how much funding do we have left? If you do hold a contract, that's your job to know that already as well. Honestly, I think contract owners should be aptly prepared for this shutdown already, but if not, it can always help just having an honest conversation with your core to start.

Speaker 1: 3:39

I agree. Yeah, communication is key for sure here. Obviously, this is something that in an ideal world would never happen. You know the system's not meant to be started and restarted, you know all over again. But in the world of you know, these polarized politics that we're living in, this is likely to be something that's not very rare in our line of business. So understanding and having that relationship pardon me, I believe is definitely key. And I would also add, on the communication front, also communicating with your staff has to be sort of a paramount consideration. You know, one thing you don't want to do is have that ambiguity start permeating through your staff, because once people are uncertain about their next paycheck one way or the other, only bad things can follow that. And you know, in order to protect your company's culture and your company's cohesion, being open and honest with them about what's going on, I think, is something that really has to be taken seriously from small business owners.

Speaker 3: 4:53

Yeah, and I also think that you know hopefully the small business can kind of prepare for that to happen. You know, always know that's a possibility when you're taking on these contracts or you're going to be transparent with your staff about what's going on. That's definitely important as well. And then also, hopefully you have the cash flow. You know you might have the cash flow. Still, you know, pay the staff. You know ideally you have that going.

Speaker 3: 5:17

So you know you don't necessarily want all of your eggs in one basket if possible, I know so. None's with small businesses and contracts that's kind of how it is. So it can majorly affect your business for a period of time. So hopefully you have, you know, set enough cash back to be able to cover for however long the shutdown will be, because ultimately the shutdown typically it doesn't last too long in my you know, my last period of time, which obviously you know if it's for a couple months, that could affect people's lives for sure. So you know what I'm trying to do is you can't take care of your people. But you know, if not, you know, try to hopefully you have other streams of revenue coming in besides with. You know, with that particular government client, you know where. Hopefully it can help you know submate things until you know things are back up and running, so hopefully the swammas have playing, playing the head a little bit for that, just in case.

Speaker 2: 6:12

Yeah, and it kind of sounds like, too, that I don't know about you guys and I don't even remember the last government shutdown I think it was 2017, 2018, where they might have been shut down for like a week or two, but yeah, I obviously wasn't around the company then. But it sounds like, regarding how it impacts the civilian employees, is that you know they sort of get furloughed, or I know that they it sounds like they did change the way that they're paid out after the shutdown is, I think they receive the payments back from what they would have made during the shutdown anyways. But I thought it was interesting that, as far as what we know, it sounds like if there is a shutdown that you know pretty much none of the civilian employees are going to be logging on, or the military folks as well, and I thought it's kind of weird that it sounds like we'll just be sort of doing our own tasks and, you know, working without their guidance. You know, which is fine. You know we could definitely find things to do.

Speaker 2: 7:21

You know, especially with. You know the work and everything that's going on within. You know the federal landscape right now, so that when they do come back, we're prepared to show. You know what we've done and that we kept going. But what do you guys think about that? And you know, just trying to, you know, keep going. You know, without this feeling of people and you know sort of, you know, do our own thing without them.

Speaker 3: 7:44

Devin in just from experiencing it from the last shut down I think there might have been a couple and that was right before you started. I know for us, for our contract, the way it was set up, you know, with one of our clients. You know we still worked through that contract, like you said. You know the civilians that we had worked with previously they were shut down so they were out, but we knew kind of like what we still need to get done. We knew like our task already to do. We just had to keep moving and keep going. You know, going through the process as far as what needed to be done. You know, even even though the civilians were not in the office at that during that timeframe we still had our tasks that we were getting done on our end, that we could still actively work on at the time Wasn't like they stuck down so like everything shut down, we couldn't keep working and we could still work and do our jobs during that timeframe. So those were the things where you know we were lucky enough, where it didn't affect us During that contract. You know we were still. You know we came, came to the office every day, got in there, did the work we needed to do and we still did that throughout, throughout the shutdown, just because the way our contract was set up.

Speaker 3: 8:55

But I like to say that there could be somewhere, some situations, where you know you do work more hand in hand with those government civilians and military members as well, and you know you to rely on each other for the work you have to do, or you can only go so far without having it work approved, or whether that might be so it could affect you in different ways depending on the kind of work, the kind of tasks that you have to do or have to complete. So I think it's kind of adjust and modify what you're doing right there and probably adjust the task of your team to be like, okay, we need to get this stuff done, you know if we're going to have to do it anyway. We're just having, we're just changing the time for when we're doing it, if we're able to do that or not. So that's, that's kind of one of the things to do is work around.

Speaker 1: 9:42

Yeah, sorry, sorry to interrupt there, we got a little delay. Yeah, I mean to your point, to all continuing the work. I think this is another one of those opportunities where, you know contractors can really show their value and really further sort of solidify their, their, their necessity in the eyes of the client. You know we are not just based off of our structure here at Country Intel and I'm sure others may be under the same structure. We are not beholden to these shutdowns. Thankfully, you know, our contract is funded regardless. So this is an opportunity for especially if it if it's a prolonged situation, for us to really show our value and for small businesses to really show their value by continuing to move, you know projects forward and executing as if nothing's happening and that way when, when this all does, you know, clear up, hopefully soon, they'll be able to jump right back into the flow of things and not have a lot of time lost to this unfortunate situation.

Speaker 1: 10:59

But yeah, a lot of those those points made really dovetail into one of the questions that I was going to ask and we'll just jump into it here. But you know, how can small businesses or any business really that's relying on the government sort of recalibrate their strategic plans to ensure that, you know, these shutdowns don't have, you know, a lasting impact on their bottom line? Because, like I said earlier, just based off the political climate that we're in right now, I really strongly doubt this is the last time we're going to see this, especially because they're usually resolved with continuing resolutions, which is just fancy political speak for kicking the can down the street for a couple months and, literally, if they enacted a continuing resolution right now, we could be going through this again in November. So how can small businesses build some resilience or contingency into their operational structure so that these hiccups don't have lasting impacts?

Speaker 2: 12:12

Yeah, you mentioned continuing resolutions. I think that's important to mention, because, even though that is kicking the can down the road, so to speak, I think what that means, though, is that, essentially, a continuing resolution is when, for a certain period of time, everything is funded as it is, but, as far as contracting goes, I don't think new contracts are allowed to start during that period, and I think that's a good distinction, because, for folks that do work with the federal government as a contracting group, if you're expecting something to get going in the new fiscal year or a couple months afterwards, and if there is a continuing resolution, I don't think that means that your work is going to start, and that's something that you really got to talk with your core about and figure out how this might impact your business. And then, as far as stuff that groups can do to sort of be proactive instead of reactive, charles, you said making sure that the work that we are doing isn't really just all federal contracting, which I know that we're working on that as well but I think it's important as well to sort of build up a bank role, so to speak. John really talks about that in a few gamble, if you play fantasy sports, if you do anything along those lines.

Speaker 2: 13:56

They always talk about bank role management, and I think that's really important for business as well, and I know that we're doing a pretty good job of that, but I think there's definitely some lessons that could be learned from the business end of things just how to manage money. So that's definitely two things that are important as far as the government shutdown goes and as far as, once again, for the continuing resolution part. I would also make sure that we're obviously always paying attention to the news. So make sure you're paying attention to the news, paying attention to what's actually going on in Congress, so you're ready to react when it does happen. And, of course, the first big date is October 1st for that, whether or not the resolution passes by then or not.

Speaker 3: 14:51

Yeah, just for small businesses that are going into it. They're newly working with the government. Things are remembered during government shutdowns what potentially could happen delayed payments or no payments. You've worked with multiple federal entities. You have a reduction in customer base just because, if you provide good services to them, there may be something that you're not able to do on a regular basis. So that's going to be a decrease in your revenue. See, if you have to be obtaining permits during that timeframe or whatever that may be, you're going to probably have difficulty doing that if that's to be through the government and also if for any kind of small business administration, loan processing, you may experience disruptions for that as well. And then those support services during the government shutdown also. So that's just some things to think about that. Small businesses that are newly working with the government that might be what's coming down the line If there is a government shutdown, which obviously there is going to come in now, but if you have to encounter that in the future or whatnot there.

Speaker 1: 16:01

Yeah, definitely. And you know, great point on the continuing resolutions part, I had no idea about that, you know that is definitely news to my ears and, I think, something that everybody needs to definitely account for because, more likely than not, that is going to be the solution for at least this upcoming shutdown's resolution, if it does happen. And you know that can have a direct impact for real on the type of, you know, all types of things staffing considerations, bankrolls considerations, like you said. So, yeah, definitely, being literate on what's going on in the news and with politics on Capitol Hill, staying up to date on that and not letting anything sort of blindside you as a leader and trying to plan for all possible contingencies, I think is definitely something we need to account for because, you know, within these we'll call them negotiations within these negotiations, there are some serious you know serious things being discussed that can have some direct impacts on a lot of different contractors, with them trying to reduce the budget sort of across the board.

Speaker 1: 17:26

You know, typically the Department of Defense has been spared from a lot of major cuts, but, you know, with politics, get involved. Really nothing is sacred. So and this isn't just you know, and that's just for the Department of Defense, with our colleagues at work in other departments, other sectors of the government. There's some real vulnerabilities that are coming to light there and a lot of lives can potentially be affected for the sake of politics, unfortunately. But you know, arming yourself with information, I think, is definitely key and probably the most practical sort of defense you can have as a small business owner working for the government right now.

Speaker 2: 18:12

Yeah, and it seems like for the container resolution that the general sentiment is that you know a CR isn't really ideal but a full shutdown would be horrible. But you know neither of those things are really great, you know for. You know contracting groups, because it's a big issue when you know new work can't start, especially when you're trying to expect it to start, and as far as things that are out there that you might be expecting a response from, you know six months down the line, you know it might be. You know another additional, you know months on top of that, depending on how long the shutdown actually does go for, or even the CR as well. So definitely some things to pay attention to in the next couple of days.

Speaker 1: 19:01

Definitely. Well, this is something that I think is going to be living with us for quite some time. I'm sure we'll have a lot of different conversations as this continues to evolve, but for now, I think we can leave it here. Thank you for listening to the Country Intelligence Report and we will speak to you next time. Thank you for listening to the Country Intelligence Report. Please like and subscribe to stay on top of the latest developments with the show. For more information on the Country Intelligence Group, please visit our website at wwwcountryintelcom. You can also be found across multiple social media platforms at Country Intel.