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Posted on Tue, 03/5/2013 - 10:00 AM by
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For example, an estimated 35 percent of suppliers to the U.S. Defense Department are small businesses, according to the U.S. Small Business Administration. In 2011, the department awarded 20 percent of its contracts and 35 percent of subcontracts to small firms. Those small businesses benefited at the time, of course. And all of their employees and subcontractors benefited too. However, those businesses now could have their contracts canceled or drastically reduced as the Defense Department and other federal agencies begin to make cuts. Small businesses also face the uncertainty of not knowing when or how their companies might be affected. Economics expert Dr. Stephen S. Fuller of George Mason University told CBS News recently that the biggest problem is so many smaller firms may be suppliers or vendors for large, prime federal contractors without even knowing it. As a result, Fuller says these smaller firms could see sudden loss of business without warning. He estimates nearly half of a projected two million job losses resulting from the sequester could come from smaller firms. Not all small businesses with federal contracts are waiting around for the axe to fall, however. For example, software and high tech consulting company Geocent gets about 80 percent of its business from the Navy, the Air Force, and the U.S. Department of Veterans Affairs. The company is working to diversify by increasing sales in the healthcare, financial, and insurance industries, Ryan Lemire, executive director at Geocent told the Associated Press. In October, Small Business Trends founder Anita Campbell explained how the sequester might affect small businesses beyond those with federal contracts. Deep federal budget could cause a ripple effect, resulting in reduced gross domestic product, unemployment, and recession. Meanwhile, Bill Dunkelberg, chief economist for the National Federation of Independent Business, insists business owners shouldn’t listen to what he calls scare tactics by political leaders. See his take in the video below. Dunkelberg says the budget cuts will take time to implement and will be less damaging than a recent two percent increase in Social Security taxes in January. Small businesses must make efforts to move away from government contracts if possible, should the sequester continue. Business owners should also encourage their political leaders to end the sequester in Washington, but without tax increases that could be equally damaging to growth. The post appeared first on Small Business Trends. MORE NEWS FROM SMALL BUSINESS TRENDS5 Ways to Get the Most Out of Good ContentGetting good content is difficult enough. It often needs to come from a professional SEO writer, not just a professional writer, and that comes at a cost. However, what does a business do once the content’s there? It can’t promote itself, and this will take some Web savvy. Otherwise, it’s a complete waste of money and that’s something no business wants. Below are some tips. 10 Ways to Improve Your Business with Mobile TechnologyA recent study shows how reliant small businesses have become on mobile technology. The 2013 AT&T Small Business Technology Poll says 85 percent of small businesses now use some kind of smartphone. And 80 percent of small firms founded less than two years ago use tablets, the survey also showed... 12+ Pinterest Apps and Tools for Pinning While MobilePinterest is not just another copycat social networking site. It focuses on the age-old adage, “A picture is worth a thousand words.” Who has time to read a thousand words all the time, anyway? Sometimes a picture is all we have mindshare for. Pinterest allows you to collaborate and to stimulate your audience by sharing images and visually engaging them. $1 Billion Tumblr Deal Turns 26-Year-Old Founder into Mega-MillionaireHave you ever dreamed of becoming a mega-millionaire with your next business idea? It’s a reality for 26-year-old David Karp. The founder of Tumblr, the popular social blogging platform, has become the latest tech tycoon almost overnight. Stay Alive. It’s Good for BusinessEntrepreneurs: here’s something to add to the list of things academics have found will enhance the performance of your business. RELATED SMALL BUSINESS NEWSOccupy Wall StreetYoung people take to the street to protest Wall Street's role in the financial crisis.... Occupy Wall Street Challenges DOJ On Foreclosure CrisisI don't know if Occupy Wall Street has been quiet lately or if I have just not been paying attention. Nonetheless, they have something going on right now. The OWS Bring Justice to Justice rally was scheduled to begin at 1:oo PM with a march on the Department of Justice. Five years... Infographic: SignsHow important is your business signage? According to the infographic below, the answer is very. A massive 8 out of 10 American consumers have entered the premises of a business simply because the sign caught their interest. Take a closer look at the infographic to see the types of signs that will ke... Yahoo Redesigns Flickr to Make It 'Awesome Again'At a press event, Yahoo CEO Marissa Mayer calls new design 'heart-stoppingly beautiful.' ... Your chance to pitch to a former “Dragon”Read the full article here: Your chance to pitch to a former “Dragon” on: THE SMALL BUSINESS BLOG. |
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Small businesses contracting with the federal government will be first to feel the effect of the sequester, the name for across-the-board federal budget cuts that went into effect in Washington Friday.