Small Businesses have a Pessimistic Outlook Following the Shutdown

Association of Business Training
October 9, 2013 — 901 views  

Reports and surveys have shown that small businesses look glum in the face of post-shutdown growth and development. People’s sentiments are at a dip currently, which means that consumers are holding back on their spending. Opening an infant industry at the moment, therefore does not seem to be viable.

The NFIB Small Business Optimism Index went to show the current sentiment in the market. It showed a 0.2 drop from the 94.1 index in August. The prediction of a government shutdown was a major cause of this, plus the downfall of the currency versus commodities and foreign capital in the markets following the announcement that no tapering would be done.

Effects of the Govt. Shutdown on the Market

Though this shutdown has not affected the country as much the last one had, the negative feelings in the mindsets of people is enough to make it a risky time to open up a new business. Starting a new business usually requires entrepreneurs to wait quite a while before they start gaining profits. This probationary period could become much longer if a business starts in uncertain times like these. It may also become very difficult for small business owners to sustain the losses along with the amount of financial capital required to get things started. For such reasons, there is quite a pessimistic outlook in the market today.

Job Uncertainty and Expansion of Organizations

With regard to jobs and job availability, there are many reasons for concern. There are a number of people who have been let go recently, and unemployment is on the rise. Since the upcoming businesses also seem to be taking a time-out until things look better, there may be less opportunities in the job market. At the same time, there are multiple reports of organizations not managing to get enough man-power.

They face a shortage of labor and find that many people are interested only in part-time jobs, rather than full-time ones. Due to the dip in the market and the deflationary trend in some of the raw materials required in business, many business owners are trying to seize this opportunity to expand. Without sufficient labor however, they find it difficult to do so efficiently.

Though the current crisis has had negative implications, the grim truth is that October may show the true effects of the shutdown on the economy. Irrespective of the different issues troubling the current market scenario, there are some industries, like online businesses, that are still on the rise.

Association of Business Training