Friday 22 March, 2013
The apocalypse is upon us. America’s economy is grinding to a halt. The sky is falling. On March 1st, 2013, the federal government of the United States issued the dreaded sequester – a set of forced budget cuts that many are predicting will close down the country and make all of our lives horrible for the next decade or so. Businesses are especially terrified of what damage sequestration will bring.
But do we really need to be so afraid? While it’s true that everyone will feel the effects of sequestration, it doesn’t mean that you as an internet marketer should close up shop and consider launching a career as full-time plasma donor. Sequestration may not hurt you that badly.
Your Business and the Federal Government
The cuts are being made to the federal government, not to businesses. But it will affect your business if it’s closely connected to the federal government. For example, if you rely on military contracts or the government is your customer or client, you’ll definitely feel the sting. The military budget, in particular, will be cut. It’s been bloated for many years, and if the product or service you offer isn’t absolutely essential, you might want to start diversifying your business quickly.
You’ll also be affected if you rely on the government for funding. It has already been announced that there will definitely be major cuts to the Small Business Administration, which offers funding for companies in the form of loans, incentives and special programs. The SBA’s loan programs will be hit especially hard and many small businesses rely on these loans to get started.
Say Goodbye to Tax Brakes
The IRS has reported that there will be a cut in tax benefits, which is not a good thing for many businesses. It offers a variety of tax breaks as incentives for businesses such as the Small Business Health Care Tax Credit which makes it easier (okay, cheaper) for small businesses to offer healthcare benefits to their employees. Health benefits make you a more attractive employer, which helps with recruiting and retaining employees.
Who Needs Marketing?
If you’re a marketing firm or freelancer that offers your services to business clients, you may see business slowing down. When companies start to feel the sting of the sequestration, they may slash their marketing budgets. Whenever budget cuts come along, the marketing is often the first to take a hit.
This doesn’t mean you should start selling your possessions, move into a trailer on the edge of town, and sharpen up your touch-typing skills for your lucrative data entry career. Businesses still need marketing – they always do – but they also need to understand why they do. This means you should ramp up your marketing so that you can more effectively teach them why they need you.
Ultimately no one knows exactly how sequestration will affect small businesses. Everyone will feel it and be adversely affected by it, but it’s no reason to panic.