"Let no one be mistaken. The Y2K problem could spell doom for any small or medium-sized company that isn't prepared," said President Clinton's Council on Year 2000 Conversion Chair John A. Koskinen.

The federal government is taking the Year 2000 Problem very seriously. And they are particularly concerned about its effect upon small and medium sized businesses, which for the most part have done little or nothing to prepare themselves. The National Federation of Independent Businesses estimates there are about 4.75 million small businesses which are directly at risk from Year 2000 failures.

A recent study by the National Federation of Independent Businesses and Wells Fargo Bank shows at least 40% of small businesses have no plans at all to deal with the Year 2000 Problem. The Gartner Group found in its study on the same issue that 23 percent have made no effort at all to even determine if they will be impacted by Y2K. Big businesses have been, in many cases, fixing their Y2K problems for one to three years already and may weather this problem better.

In enacting legislation determining this past October 19-23 to be Y2K Awareness Week with a particular emphasis on small businesses, President Clinton said, "As our Nation prepares for the year 2000 (Y2K), we face an urgent need to address the Y2K problem, which may cause computers and embedded systems that run America's critical infra-structure to malfunction or even shut down. With little over a year until January 1, 2000, this is a serious global challenge that businesses and governments around the world must address."

U.S. Secretary of Commerce William M. Daley asserts that "[w]hile publicity about the Year 2000 problem is widespread, many small and medium-sized businesses have not yet assessed their risk. But time is running out. If these firms do not pay attention to this potential problem today, they risk losing customers, or even their business."

Small businesses are a part of and depend upon a long supply chain and service partners. If their suppliers are not Y2K compliant, business could be hurt or even grind to a halt. "A disruption to [your suppliers] directly affects you -- even if the supply chain is severed somewhere else, you pay the price," the SBA warns. "You buy goods and services from some businesses, and you sell goods and services to others. If your trading partners fail, your cash flow can suffer critically." They emphasize it is important to start checking with your suppliers about their Y2K plans NOW so both you and they can make adjustments in the year remaining.

And then there are new liability issues for businesses. The SBA states that "because the year 2000 problem is a foreseeable problem, the officers and directors of your organization could be held personally liable in shareholder suits."

In WorldNetDaily, David M. Bresnahan wrote (entire article here):

The change in date from Dec. 31, 1999 to Jan. 1, 2000 is not the only date business owners are warned to prepare for. The date September 9, 1999 might be represented in some computer programs as 9999, which is also used to signal computers of a malfunction. The Year 2000 is also a leap year, compounding the problem even further for Feb. 29, 2000.

Very few businesses have considered the problems they could face from embedded systems. The SBA warns that this may actually be the source of the most pervasive disruptions. Computer chips can be found in virtually all electronic devices, and they cannot easily be tested or changed. Such embedded systems often have a controller that keeps track of the date using code that is embedded into the chip itself. If that chip is not programmed to handle the date change properly, the system it operates could fail.

This could impact such things as security systems, phones, heating, sprinklers, cash registers, lighting, and all electronics. Every area of business, in addition to computer systems, can be a source for failure.

How do you know if embedded systems will work at the turn of the century?

Testing is usually very difficult because most embedded systems do not allow for changing the dates and times. Embedded systems generally run off of the internal clock. Therefore, "diagnostic testing tools do not work on embedded systems," is the bad news given to those at the SBA seminars.

To this end, they have been offering seminars throughout the country. To find out if there is a seminar in your area this week, call them at 1-800-U-ASK-SBA.

The Internet is a great resource for information about how to plan for your businesses' Y2K needs. Take for example, this article from the Denver Post about how one small business owner is going about assessing and meeting her firm's needs. The SBA also uses itself as a problem-solving case and has published its own plan here. These can both start you on the road to thinking about how to help your own business.

You can also take the SBA's self assessement for businesses. They have also set up a page listing steps to take in preparation.

Tim Kelley, a network consultant from Network Technology Services says "I would strongly urge small businesses to evaluate your IT infrastructure. That includes all electronic components - not just computers. Anything electronic can have an embedded chip. That's where there's going to be problems, if we have any."