For a real-world perspective on how the government shutdown is impacting small businesses, we spoke to Brian Butler, a member of the U.S. Chamber Small Business Council and President and CEO of Vistra Communications based in Lutz, Florida.
Vistra Communications, a certified service-disabled veteran-owned small business (SDVOSB), offers integrated marketing communications and consulting throughout the U.S. and beyond.
During the government shutdown from December 2018 to January 2019, the business faced financial hardship and cash flow issues.
“We were performing multiple government contracts. Most of those contracts were considered essential, so our staff kept working and continued to be paid. In some cases, however, the support staff processing our government invoices were not considered essential, so we did not receive timely payment for services. These delayed payments from our government customers put a financial strain on our business,” Butler said.
Preparing for the 2025 shutdown
In the weeks leading up to the latest shutdown, Vistra Communications contacted subcontractors and contracting officers and program managers with multiple government contracts to understand the impact.
They also used the time to get a better read on their financials.
“We have also met with our banker, assessed our line of credit, and ran scenarios to help determine how long we can continue operations and make payroll,” said Butler.
Why it matters: “We have uncertainty about when we will be paid for work already performed and work continued to be performed for essential services. We must continue to pay our staff, but the government may not pay us in a timely manner,” Butler said.
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Butler worries about the morale of his workforce and subcontractors because of the uncertainty. His internal staff is concerned about the ability to meet payroll and other operating expenses in the face of delayed payments.
During a shutdown, proposals for work Vistra Communications has submitted to the government cannot be awarded, limiting the company’s ability to expand or to continue supporting the government.
Potential Burdens for Business, Economy
Butler said delayed payments may place a financial burden on the business and their ability to continue operations, which is also a worry for their banker.
“A prolonged shutdown could cause significant damage to our business,” he said.
The big picture: When the government partially shut down in 2018, it reduced economic output by $11 billion in the following two quarters, including $3 billion the U.S. economy never regained, analysts estimate.
Learn more: How does a government shutdown impact small businesses? The Chamber’s Senior Vice President of Small Business Policy Tom Sullivan breaks down the potential impacts to small business contractors, Small Business Administration (SBA) loans, business travel, and more.
Thaddeus is a senior writer and editor with the U.S. Chamber of Commerce’s strategic communications team.