07/07/2008
As energy prices continue to soar, small business owners are feeling the pinch in their pocketbooks. In the recent Problems and Priorities survey conducted by the NFIB Research Foundation, energy costs ranked as the second-highest problem for small business owners in 2008.
Forty-three percent of the respondents to NFIB's Problems and Priorities survey ranked energy (except electricity) as a critical problem—up from only 25 percent in 2004. Thirty-eight percent of small businesses cited operating vehicles as their primary energy cost, one-third cited heating and/or cooling, and one-fifth said operating equipment.
NFIB's Problems and Priorities survey reveals how rising energy costs affect small business in more ways than one: As energy costs have skyrocketed over the last two years—and increased even more just within the last six months—small business owners are not able to adjust the price of their goods and services quickly enough to match the rapid cost increases without hurting their customers, and, in turn their business. Additionally, small business owners are not able to change their business practices fast enough to offset the energy cost increases they are suddenly facing.
The Problems and Priorities survey also addressed the cost of electricity rates, which, with 16 percent of small business owners calling it a critical problem, is ranked 9th—up from 10th in 2004 and 19th in 2000.
Because small business owners depend on energy supplies at globally competitive prices to effectively operate their businesses, finding quick solutions to the rapidly rising energy costs is crucial. NFIB has voiced its support for several proposals that would help lower energy costs while protecting small business, including:
- Suspending the federal gas tax from Memorial Day through Labor Day
- Reducing the federal diesel tax from 24.3 cents per gallon to 18.3 cents per gallon
- Temporarily freezing oil shipments to the Strategic Petroleum Reserve
- Exploring domestic energy supplies in an environmentally friendly way.
As we continue to look for small business-friendly solutions to the energy crisis, we ask that you share your story with us on how rising energy costs have affected your business.
