Government Shutdown Impact on Small Business

 

Impact of Government Shutdown Is Uneven Among Small Business Executives; They View Shutdown Through the Same Lens as Rest of Country

 

OvationMR surveyed 825 small business owners, partners and executives between January 18-21, 2019 to better understand how they are being impacted by the government shutdown. All respondents are employed full-time or self-employed at organizations with 50 or fewer employees and with less than $10 million in revenue. The sample was stratified by region.

We found that:

• The shutdown is viewed as preventable, likely to last another month, and is being followed closely in the news by small business owners and executives, regardless of their political views or the shutdown’s impact on their business.
• The impact of the shutdown on small businesses is uneven. Only 45% of respondents say their business is impacted.
• Those impacted by the shutdown have very different views of it than those who are not impacted. They blame Trump in higher numbers and don’t see border issues as worth the shutdown.
• Small business owners and executives are divided along party lines much like the rest of the country on who to blame for the shutdown.

 

 

The pressure to resolve the shutdown may be limited from the small business community.

 

A majority (55%) of small business owners and executives said it was having no impact on their business. Another 30% said that it was having a minor impact while only 1 in 7 (14%) said that it was having a major impact.

Moderately sized small businesses with at least six employees were more than twice as likely to say the shutdown was having a major impact (19% vs. 9%).

 

What impact is the government shutdown having on your business?

 

 

 

 

The impact of the federal government’s impact on small business is typically indirect.

 

Only 19% of those who are impacted by the shutdown work directly with the federal government.

Does your organization work directly with the federal government?

 

 

 

 

Lost revenue due to the shutdown is highly uneven across the small business community.

 

Among the 45% of small businesses impacted by the shutdown, they face a median of nearly one-third of their revenue, compared with only 2% of the 55% who said they are not impacted.

 

What percentage of your business revenue has been lost as a result of the government shutdown?

 

 

 

The impact of the shutdown on their business typically dictates whether respondents think small businesses are disproportionately impacted by the shutdown.

 

Over 3 times as many of those impacted by the shutdown think small businesses are disproportionately hurt more (57%) than think they are hurt less (18%) by the shutdown. This ratio is roughly even among those not impacted, 38% of those respondents say small businesses are hurt more than large businesses, and 39% saying small businesses are hurt less.

 

 

Compared to larger businesses, how do you think small businesses are hurt by the government shutdown?

 

 

 

 

Small business owners and executives are generally in agreement that the shutdown could have been prevented.

 

Roughly 7 in 8 (87%) think the shutdown was preventable.

 

 

 

Do you think the government shutdown was preventable?

 

 

 

 

Small business owners are bracing for the shutdown to last roughly another month.

 

Expectations for the shutdown length are similar regardless of the impact on their business or political party affiliation.

 

 

Which is closest to how long you think the government shutdown will last?	Total	Impacted by Shutdown	Not Impacted by Shutdown	Rep	Dem	Ind
Another week	32%	33%	31%	36%	31%	29%
Another month	53%	50%	54%	49%	54%	54%
Another quarter	9%	9%	9%	10%	9%	9%
Another year	2%	3%	1%	2%	1%	2%
Until the 2020 election	4%	4%	4%	3%	4%	6%

 

 

 

News awareness of the shutdown is similarly strong and flat across subgroups.

 

Just over half (51%) have heard a great deal about it and nearly 4 in 5 (79%) have heard at least a fair amount.

 

How much have you heard or read about the government shutdown in the news recently?	Total	Impacted by Shutdown	Not Impacted by Shutdown	Rep	Dem	Ind
A great deal	51%	52%	50%	51%	55%	46%
A fair amount	28%	28%	28%	29%	26%	30%
Some	14%	14%	14%	12%	15%	15%
Not very much	6%	4%	7%	6%	4%	7%
Nothing at all	1%	2%	1%	2%	0%	2%

 

 

Blame for the shutdown among small business owners and executives divides under familiar political fault lines.

 

10 percent more small business owners and executives blame Trump and the Republicans than Democrats in Congress for the shutdown, a smaller gap than what has been seen in recent national polls of voters. (roughly 20% in the recent Quinnipiac Poll) This support falls roughly on party lines.

 

Those impacted by the shutdown blame Trump and the Republicans over the Democrats by a 2 to 1 margin, while those who are not impacted blame the Democrats over Trump and the Republicans by a 7-percentage point margin.

Who do you blame more for the government shutdown?	Total	Impacted by Shutdown	Not Impacted by Shutdown	Rep	Dem	Ind
President Trump & Republicans in Congress	51%	62%	43%	18%	89%	50%
Democrats in Congress	41%	31%	50%	73%	9%	40%
Don’t Know	7%	7%	7%	9%	2%	10%

 

 

 

Border security funding warrants the shutdown more than a wall.

 

Small business owners and executives are split nearly evenly on whether border security funding warrants the shutdown, while the wall is seen as important enough to shutdown the government by a 3 to 2 margin (61% to 39%). Again, those impacted by the shutdown are less apt to think either framing of the border issue warrants the shutdown.

 

Is border security funding/ funding a border wall an issue which is important enough to shutdown the government over?		Total	Impacted by Shutdown	Not Impacted by Shutdown	Rep	Dem	Ind
Border security funding	Yes	49%	41%	55%	78%	21%	46%
	No	51%	59%	45%	22%	79%	54%
Funding a border wall	Yes	39%	31%	45%	66%	13%	36%
	No	61%	69%	55%	34%	87%	64%

 

 

 

There is more pressure to compromise from small business owners and executives on President Trump than on Democrats.

 

Those impacted by the shutdown think Trump should compromise by more than a 3 to 1 margin (74% to 22%).

Should Democrats in Congress compromise with President Trump to end the shutdown or should they not give in to his border wall demands?

		Total	Impacted by Shutdown	Not Impacted by Shutdown	Rep	Dem	Ind
	Compromise	57%	48%	64%	78%	21%	46%
	Not give in	36%	46%	29%	22%	79%	54%
	Compromise	66%	74%	59%	45%	87%	67%
	Not give in	30%	22%	36%	52%	10%	26%

 

Should President Trump compromise with Democrats to end the shutdown or should he continue to insist on funding the border wall as a condition for reopening the government?

 

 

 

 

 

 

Trump’s most recent offer was viewed with skepticism.

 

More saw it as political posturing (48%) than as a realistic offer (36%).

 

 

Do you think President Trump’s offer is a realistic offer or does it represent more political posturing?

 

(N=321, added after the Saturday announcement)	Total	Impacted by Shutdown	Not Impacted by Shutdown	Rep	Dem	Ind
Realistic offer	36%	29%	42%	68%	15%	30%
Political posturing	48%	56%	42%	18%	77%	46%
Don’t Know	15%	14%	16%	15%	7%	23%

 

For more details on the comprehensive findings of this study, please contact Jim Whaley: jim.whaley@ovationmr.com

For more information about accessing OvationMR’s Global Business-to-Business Online Survey Panel & Audiences: info@ovationmr.com