DMV small businesses also bear brunt of Congress’ budget brawl

By Morgan Sweeney
The Center Square

As Congress convenes for a rare Sunday session amid the ongoing shutdown, the capital region’s small business owners wait with baited breath.

Besides federal workers, benefits recipients and active-duty military – who might go without pay on Nov. 14 – small business owners in the capital region are some of the most eager to see the government reopen.

The capital region encompasses Washington, D.C., parts of Maryland, Virginia and West Virginia (often locally referred to as the DMV) and is home to hundreds of thousands of federal workers and active duty military. As federal families feel the pinch, so do the small businesses that depend on their spending, as well as the businesses for whom government contracts comprise most – if not all – of their revenue.

C2A Defense Strategies in Herndon, Virginia, is one such business. Started by Carrie Arredondo in 2022, the company specializes in business development, capture management, leadership and workforce development and technical training. Arredondo coordinates all the services herself. She said a healthy month for the company would look like contracts with five or six clients, generating roughly $50,000.

One month into the shutdown, she had already lost about $30,000.

Arredondo said that she has experienced breaches of contracts – she assumes because of the shutdown – but also because of the shutdown, she has no recourse.

“I’m not able to report this to the FTC. I’m not able to get any sort of support from the government when it comes to this specific situation,” Arredondo told The Center Square.

The sudden cessation of government funds has disrupted Arredondo’s business, but empty desks and unanswered phone calls are almost just as frustrating. Arredondo relies on direct communication with the government to perform a lot of the services C2A provides, but now that communication is stalled.

“I don’t have access to government people,” Arredondo said. “We can’t put teaming together. We can’t put strategies together. We don’t have any communication at all to those key people and the information that we need. So it’s been very, very difficult navigating this.”

Arredondo’s husband is also a federal employee who has been working without pay. She said after 30 days of the shutdown, she’d expect it to take two to three months for her family to recover and get back to life as normal, but if it were to last until the end of November, it’d be more like six.

Robert Wood, owner of EcoCaters and a performance nutrition company that works with professional sports teams, estimated he saw a 25% uptick in cancellations for the first month of the shutdown. Many clients who haven’t canceled are having to scale back the cost of planned events, some by as much as 40%. Some are getting creative.

A sizable client Wood has worked with in the past was talking about doing a potluck for one of their events instead of catering.

“A major company talking about having a 400-person employee event as a potluck is crazy,” Wood told The Center Square. “I’m just like, wow, that’s a sign of the economy if I’ve ever heard one.”

Both of Wood’s companies have multiple locations across the country, but Wood has enjoyed working in the D.C. market for years, partly because of its stability even when other parts of the country may experience economic challenges. But now, D.C. has faced a kind of uncertainty that other major cities haven’t, even before the shutdown.

“D.C. was dealing with financial headwinds that the rest of the country was just not having to deal with… The loss of jobs, the erratic, just kind of atmosphere that we were all trying to operate in,” Wood said.

Darius Davie, owner of wellness brand Groom Guy, a luxury barbershop in the DMV, said the shutdown stands out in his almost 10 years in the hair industry.

“I’ve been in the hair industry for nearly a decade and never witnessed anything like this,” Davie told The Center Square. “The dip in bookings is evident and we’ve had to reposition some of our offerings and days to compensate for that.”

The U.S. Chamber of Commerce and a coalition of business associations issued a joint call to Congress on Oct. 30 to pass a clean stopgap funding measure and reopen the government, after the chamber had released an interactive map showing some of the impacts of the shutdown to small businesses. Over 65,000 American small business contractors “have nearly $3 billion a week at risk because of the shutdown, with $12 billion just in the month of October alone,” according to the chamber’s analysis.

While the shutdown has created a lot of uncertainty for her own family, she also witnesses how it affects other families as a resident of northern Virginia.

“I take my daughter to school and I’m seeing kids with no coats and no food,” Arredondo said.

The longer the shutdown persists, the more her frustration grows.

“I think that the American people, and especially the small businesses, we deserve to know what is the true intent behind this. And without involving politics, because people are suffering. Families are suffering,” she said. “We don’t understand it at all.”