Quantcast
Get breaking news alerts via email

Click here to manage your alerts
In this Friday, Aug. 30, 2013 photo, LaJuanna Russell, CEO of Business Management Associates, Inc., poses for a photo in Alexandria, Va. Russell has lost a third of her revenue and about half of her staff to federal budget cuts. (AP Photo/Susan Walsh)
Small Talk: Business owners still struggling after budget cuts
First Published Sep 06 2013 09:48 am • Last Updated Sep 06 2013 09:48 am

LaJuanna Russell has lost a third of her revenue and about half of her staff to federal budget cuts.

"It has been just a very difficult year," says Russell, whose management consulting firm, Business Management Associates, has had contracts with federal agencies including the Pentagon and the Departments of Homeland Security and the Interior.

Join the Discussion
Post a Comment

The budget cuts, known as sequestration, slashed Russell’s $3 million in revenue by $1 million. Her staff of 25 is now down to 13.

Bob and Bonnie James saw every one of their company’s existing federal contracts, including training work for the Army, Marines, Air Force and the government-funded Cherokee Nation Hospital, canceled when the cuts hit. The sequester erased tens of thousands in revenue and stamped out hiring plans.

The $85 billion in budget cuts officially began March 1, but owners like Russell started feeling the impact last summer. Government employees cut contracts in advance, anticipating that they’d lose funding. Among those badly hurt were businesses that provide training and consulting services that aren’t considered essential. Like Russell, they’ve had to lay off workers as their revenue plunged.

There is some hope. Small business owners may get a boost from so-called ‘use-it-or-lose-it’ federal spending as the end of the government’s fiscal year — Sept. 30 — approaches. Some report that they are hearing from agency contacts that they haven’t spoken to in months.

But end-of-the-year spending won’t reverse the pain that contractors like Russell and Bob and Bonnie James have felt. The budget cuts have hurt them professionally and personally and have forced them to make tough decisions.

A DEVASTATING BLOW

Business Management Associates helps employers, including government agencies, come up with more efficient ways to get work done and assists with human resources issues. Under one contract, the company created a staff recruitment plan for the Department of Homeland Security. The Alexandria, Va., firm also provided support as the plan was carried out.

Russell started feeling the effects of the federal budget cuts in July of last year, months before they were actually in place. At the time she had seven federal contracts. The Department of Homeland Security cut back the number of hours that her employees were working on one contract by two-thirds. Then the contract was shortened by four months.


story continues below
story continues below

Russell was caught by surprise. She had to lay off five staffers because she didn’t have another contract to replace the lost revenue.

"Because of everything going on, there was nothing else to move them to," she says.

Another contract was cut in January, and a third in May. Russell’s bank was concerned about the loss in revenue and the fact that Russell had borrowed from her line of credit to meet expenses. Bank officers wanted to know when she’d be able to replace the business she lost.

"I said, ‘what do you think I’ve been doing? I’ve been submitting bids all year, but the government hasn’t been sending much money,’" she says.

The bank asks her each month how things stand, and requires her to fill out extra documents about her company’s finances.

"They’re leaning on my neck. It’s hard to breathe," she says.

March, when the budget cuts officially hit, was the low point for Russell. "When you take two steps forward and one step back, it’s hard to pick yourself up and keep moving," she says.

But her mother helped her come out of her funk.

"She said that God had a plan for me," Russell says. "She told me to keep my faith and maintain positive thoughts."

And Russell’s own optimistic streak took over. She believes that she’ll be getting more contracts from the government perhaps as soon as this month. Agency employees are asking for contract proposals. Government contractors may be able to nab some revenue as agencies scramble to spend money that they will lose if they don’t spend it by Sept. 30.

"Everyone says it’s going to happen when this fiscal year ends," she says. "If I can get through this period now, then I’ll be in more of a ‘let’s see what happens’ state."

Next Page >


Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Login to the Electronic Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.