Small Business Struggles With Rising Energy Costs
Small business owners depend on energy supplies at globally competitive prices to operate and effectively run their businesses. Today, small business owners are finding themselves in a financial crunch as the cost of diesel and fuel oil, natural gas, and propane continue to skyrocket.
The results of NFIB's Small Business Problems and Priorities survey revealed that energy costs rank as the second most-pressing problem for small business owners in 2008, two positions higher than in 2004. Today, 43 percent evaluate the problem as critical, compared to one-quarter of owners in 2004. According to NFIB's Energy Consumption poll, energy costs are one of the top three business expenses in 35 percent of small businesses. Owners use energy for a number of purposes essential to the business.
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| Tell lawmakers that the livelihood of small business is dependent on lower energy prices. |
The primary energy cost for 38 percent of small firms is operating vehicles, for one-third heating and/or cooling, and for one-fifth operating equipment. However, the amount of energy used fluctuates greatly by industry and region. The problems created for small business owners by the current rise in energy costs are two-fold. First, energy costs have increased rapidly over the last two years and even more so in the last six months. Small business owners are not able to adjust the price of their goods and services quickly enough to match the steep energy cost increases without hurting their customer base. Second, owners are not able to change business practices fast enough to offset the increases. For example, most owners cannot afford to buy new, more energy efficient equipment if current equipment still has useful life. They are effectively caught in a squeeze that only time and/or good fortune will release.
In order for the U.S. economy to withstand the current downturn, is critical that America's small businesses have access to affordable and reliable supplies of energy in order to remain competitive. NIFB recognizes its members concerns and is dedicated to working with lawmakers to find energy solutions that work for small business.
