A visitor walks by the U.S. Capitol in Washington, January 22, 2019. Jim Young | Reuters

The recent government shutdown hit federal workers the hardest, with some 800,000 furloughed or forced to work without pay. But small businesses across the United States had to deal with unexpected trickle-down effects that caused disruption and uncertainty. As one small-business owner in Maryland noted, "I live in a community with several government agencies. When my community is affected, I am affected." The clearest problem for small businesses was the dropoff in customers, as many federal workers or contractors — or those with federal workers in their family — were suddenly less willing or less able to spend money. According to the latest CNBC|SurveyMonkey Small Business Survey, 35 percent of small-business owners nationwide said they experienced a "sales slowdown" attributable to the lack of demand from nearby federal workers. Another 13 percent reported the "direct loss of revenue from a contract with a government agency." The survey was conducted by SurveyMonkey from Jan. 28–Feb. 4, polling more than 2,200 small-business owners across the country. The degree of this revenue loss is tricky to measure, as small businesses span the full range of industries, from mom-and-pop corner stores to restaurants, health-care providers and technical consulting firms.

A series of unique effects

Many small-business owners wrote in to describe the unique ways their businesses were affected, and this loss of revenue was a frequent theme. "It has impacted my clients and therefore me" said one small-business owner in Florida. The shutdown "inhibited my sales to government agencies," said another in Texas. A small-business owner in Michigan noted "some government employees [are] not buying packages, because they have more important issues to deal with." But it's not just revenue loss that has been problematic for small businesses. Some 14 percent noted "delayed regulatory approval for products or services," and 10 percent experienced "restricted access to SBA (Small Business Administration) loans." Some wrote in similar responses having to do with a lack of access to necessary government resources, such as frustration that they couldn't contact the IRS to help with tax preparation or the inability to access E-Verify to screen new employees. One Nebraskan small-business owner noted that her farm loans were impacted, and another in Massachusetts said she couldn't access information she needed from the Library of Congress. Aside from these direct effects, the shutdown created a general anxiety that affected many, if not most, small-business owners, even those who weren't affected financially. One small-business owner in California reported the shutdown caused "low morale" at work because one of her employees had a spouse who was directly affected by the shutdown. Many reported a loss in consumer confidence, mental stress affecting their clients, a general sense of fear or uncertainty and deferred decision-making until the shutdown was resolved. Oftentimes these responses anticipated future revenue losses, but just as often, they reflected a concern on the part of small-business owners for the well-being of their local communities.

Not just a DC-area small-business issue