By now, it's pretty clear that we're in for a prolonged period of government cutbacks on the city, state, and federal levels. Should you be worried about the potential impact on your business? Let's just say you need to pay close attention. Change creates opportunities, and there's going to be a lot of change in the coming years, as governments everywhere are forced to reduce spending and cut back on services.

You may already be anticipating change if you do business with the government, but if you don't, you shouldn't make the mistake of thinking you won't be affected. All businesses will be affected. Some will feel the impact through customers that do government work. Every business will feel the ripple effects in the overall economic environment. Just recently, for example, the new governor of New York, where I live, announced his intention to cut about 10,000 jobs from the payroll. Whatever else that may mean, it will make available a lot of former state workers for employment in the private sector. It also means companies won't be competing for talent with state agencies that offer more security (supposedly) and plusher benefits. And it may mean that the state government will outsource more functions, which would create growth opportunities for private businesses.

If you have government contracts, my advice is to be proactive. You already know that the agencies you work with will be under pressure to reduce their spending. Don't wait for them to come to you. Go to them with ideas for saving money. My box-storage business showed our customers at city hospitals how to reduce their records-management costs by almost 10 percent. We wound up with more business as a result.

You should also be proactive with customers that do business with the government. It's likely that they're already thinking about how to adjust to the change. I would set up strategy meetings with each of them. Find out what they're thinking, how they plan to respond, what changes they feel they have to make in their businesses during the coming years. And tell them you want to be their partner. It's an opportunity for you to solidify your relationships with those customers and maybe pick up some new business in the process.

I don't mean to be Pollyanna-ish about the situation. You can't cut out millions of dollars in government spending without pain being felt in the economy. But usually economic shocks catch us by surprise. This is one of the few times we have advance warning of what's coming. That's a big advantage, and one that you shouldn't let go to waste.

Please send all questions to Norm Brodsky is a veteran entrepreneur. His co-author is editor-at-large Bo Burlingham. Their book, The Knack, is available in paperback under the title Street Smarts: An All-Purpose Tool Kit for Entrepreneurs.