Affordability decided the 2024 election and will be the top issue in the midterms later this year. Generally, we think of affordability in terms of individuals and their daily lives, but it is equally a challenge for businesses—especially small, main street businesses who have just as much control over the prices they pay as the general consumer, which is to say, not much if at all.

A key aspect of affordability for small businesses is energy: The electricity to heat and light their store, the gasoline to reach a client site, the diesel to run their truck. A new survey from the National Federation of Independent Business (NFIB) now sheds light on small businesses and energy, revealing increasing cost pressure that is having pronounced impacts on profits and the prices they offer to consumers.

To set the context, the majority of small business owners find energy costs to be “Very significant,” at 53%. An additional 28% find them “Moderately significant,” while just 3% say they are “Not at all significant.” What’s more, the cost pressure is worsening, with nearly 80% of small business owners reporting that their energy costs have at least moderately increased over the last three years.

Significant and increasing costs are obviously bad news, but what comes next matters too. How do small business owners manage costs? If they have plenty of effective levers to pull, policy makers can let them adjust and handle the costs themselves. Unfortunately, the data shows that owners have no great ways to respond to rising energy costs. When asked how they have managed the recent cost increases, the top answer was simply reduced profits. In close second? Increased prices. Less profitable businesses selling more expensive products is a bad outcome for company and client alike.

By energy source, the data identifies electricity as the biggest problem for small businesses, both in that it is used most frequently (92% identify it as at least a mild cost pressure) and in that it has the highest percentage of users saying it is a significant issue. Also worth mentioning are gasoline, the second most used source, and diesel, which has the second highest percent of users saying it is a significant cost issue. The survey data collection occurred before the Iran conflict, when gasoline and diesel costs were much lower.

It is no surprise to see electricity at the top of the list for cost, as government data shows that national electricity prices have increased by 39% over the past five years. This is a major runup that small businesses can ill afford.

Making matters worse, cost is not the only challenge associated with electricity, as 66% of small businesses report experiencing a power outage in the last 12 months. And, while 28% were unsure of the cause, 55% said that equipment failure was the problem. To underscore the point, reliability is often even more important than cost: Cost makes it hard to run your business, but you can’t run it at all when the power is out.

Together, the data from this new survey clarify a previous finding from NFIB’s quadrennial, in-depth study of small businesses’ top problems and priorities. These reports are extremely comprehensive, covering 75 issues from health care to the internet to cash flow and much more. In the most recent iteration (which came out in 2024) both electricity costs and the cost of natural gas, propane, gasoline, diesel and fuel oil had moved up into the top 10 biggest problems. Even compared to the wide library of difficulties that small businesses face, energy costs are a significant issue.

This is a wakeup call to policy makers. Affordability is a problem for small businesses too! And energy costs are a huge piece of the puzzle, causing lost profits and price increases for businesses across the country. All solutions must be in play, from maximizing all energy sources to improved transmission to streamlined regulations. Right now, small businesses are suffering when they should be thriving.