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Startups Still Shell-Shocked by Govt. Shutdown

As the stock market soars and valuations get bigger, a survey finds it was hard to tell what was accomplished.

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When we see the stock market hitting new highs and tech companies with no revenue nabbing spectacular valuations, it almost looks as if the government shutdown had no impact at all.

But let’s be clear: When it comes to small businesses, i.e., those with 10 employees or fewer, it’s a different story and the facts back it up.

According to our SurePayroll Small Business Scorecard® for October, optimism remains low (62 percent), hiring is down (1.7 percent year-over-year) and only 38 percent of participants plan to make new investments in the fourth quarter this year. That last figure is down from 45 percent prior to the shutdown and 54 percent in June. 

Only 27 percent now expect to exceed the previous quarter’s results, down from 42 percent before the shutdown.

Small businesses with less than 10 employees--the real local businesses that power the economy--are frozen and frustrated right now, and they don’t feel any help coming from the government. 

In fact, 90 percent said their concerns are not being heard on Capitol Hill, according to the survey, and two-thirds would not reelect their current Congressman or woman if the mid-term election were held today. 

And it’s not just the data saying this. Our customers, the majority of whom employ fewer than 10 employees, share these concerns.

Said Kaitlyn Rice: “Congress needs to work together to form a long-term plan. We're sick and tired of these ‘government shutdown’ dates. They stir unnecessary emotions, make people nervous and overall disrupt the flow of business. People should be able to feel confident in their government, not have it added to their list of concerns on top of those already associated with running a small business.” 

Or this one from Tony Stirk in Springfield, Virginia: “Congress needs to understand that small business is big business in this country, but it has a small voice when it comes to talking politics. Small businesses don't have resources to spare to deal with political issues.”

But perhaps Russell Knapp in Houston, Texas put it best: “Is it the new norm to shut down government when you don’t get your way?”

If it is, and we have to remain in a continued state of crisis, small business will remain in hibernation.

IMAGE: Shutterstock
Last updated: Oct 31, 2013

MICHAEL ALTER is president of SurePayroll, America’s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University.
@michaelalter




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