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| BUSINESS NOT AS USUAL FOR SOME... |
And now with the 2013 government shutdown, how can businesses protect themselves in the future?
1) Ensure no more than 30% of business income comes from government.
If your business is based on all government income, change the business model from this point forward. The trillion dollar (plus) debt ceiling should say it all. While the United States is floundering with a lower country credit rating, the payment for the work you may have completed or have in progress could be at risk if there is a sudden stall to payments being issued to non-government staff. Get out of the comfort zone and search for business in the private corporate sector. Easy money is not always the best money! After all, the pay is normally greater and hard work is oftentimes rewarded with additional recognition (e.g. future projects, marketing of services, great references, etc.)
2) Only solicit government business that is mission-critical.
The government shutdown areas that it felt were not really important for the citizens of the United States to be safe and monetarily sustainable. The White House, Senate, Social Security, Military (active), Air Traffic Control, US Postal Service, and NASA Mission Control are a few entities that remain open and operational. Agencies like the National Parks, Federal Drug Administration, National Institutes of Health, EPA were not considered as viable risk operations. This should speak loud and clear that all future business should be done with an entity that is identified as essential to the United States of America, even in hard times. For more listing of agencies, click here.
3) Upgrade the business continuity plan.
Most businesses handle disaster recovery in cases systems shut down but never government. There needs to be careful evaluation on what it will cost the company contractually - fines encountered for not delivering or halting work related to the government agency. There should also be an evaluation on what staff, if any, must be temporarily laid off if there is no extra non-government work to cover their employment. And of course, identify what loans will need to be tapped into to cover human capital expenses and potential losses as well as a way to get the money back. This also includes getting the most of the business continuity insurance which can, in some cases, pay a portion of what will be lost based on the circumstance.
While the government plays with the lives of many people who need services and the checks of those employed by government (deserving or not) who may be living check-to-check to take care of an ailing parent or paying off debt or in a dire circumstance, business leaders need to use this as a lesson on how to plan appropriately. After all, the divide between political parties has been existent for centuries but it is up to the CEOs and business owners to make sure their business can at least withstand decades of this adversity.
For more business planning, be sure to follow this blog at blog.therlcgroup.com and pick up a copy of the book, Get A Clue - 10 Steps to an Executive IQ.
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