Take Action Now

Does federal policy at a national level truly affect your business in any meaningful way? Most small business owners say that federal policy proposed by the White House or proposed and enacted by the House has little or no direct impact on their businesses if they are in an industry not affected by governmental regulations. While it is understandable that some business owners might think this way, clearly this is not the case.

Let’s take the current policy views being forwarded and implemented in regard to our energy and environmental issues. While it would be easy to digress into our current foreign policy and its impact on fuel prices, I will refrain from doing so here. However, looking at the escalating price of oil and its ripple affect throughout the economy, governmental policy is clearly having a detrimental impact on small business. This impact is causing an inflationary wave that will not quickly be reversed. While many think that an escalating price of a barrel of oil only impacts how much is paid per gallon at the pump at their local corner, the impact is far greater and is felt in all sectors of the economy.

Take for example your local restaurant that happens to deliver to people’s homes as well. The escalating price of gas has a direct impact on decreasing their profit margins on their delivery service, causing either a decision to terminate their delivery service or raise their prices. Either way, the consumer loses. And what about the neighborhood landscaper? The price of gas has a direct impact on his profit margin given that most of his equipment is gasoline operated. Therefore he must raise his prices to maintain his profit margin. A further example is various sub contactors within the construction industry. Look at the roofing contractor who is laying mostly petroleum based materials and the paving contractor who is laying petroleum based products? They are affected negatively due to the increasing cost of materials, forcing those costs to be passed on to the consumer. We can also look at the transportation industry all the way from the local taxi companies to nationwide haulers including rail, air and road. How many routes does one cab driver have to drive before his tips will pick up the additional cost of the fuel he uses each day? You’d be shocked to know the true answer. Next time you’re in a cab, ask the question. Across the board the end user is impacted as prices increase either directly, as with airline ticket costs, or indirectly as higher costs of transportation by manufacturers are passed on to end users. Further, be conscious for just an hour of how many things you touch, see and pick up that are made of, encased in, or have a component of something made out of plastic, another petroleum based product. Again, ultimately the consumer will be paying the price for the increased cost of producing these products.

As a country, we have shown true will and resolve at times of great national need. Without getting into a debate of our current energy policy and its negative impact on the environment, there is no doubt that swift and immediate action must be taken to reduce our country’s dependence on fossil fuels. Not doing so has a clear inflationary impact on small business. While we read of the huge oil companies generating record multi-billion dollar profits, small businesses, entrepreneurs and end consumers are taking it squarely on the chin. There is a clear opportunity to enact legislation that will stimulate entrepreneurial activity; reduce inflationary pressures as well as have long term environmental benefits. Such things as changing emission standards, raising the number of miles per gallon each vehicle must get, and creating incentives and minimum production standards for vehicles which run on bio fuels are just a few examples.

My thoughts are that we must take action. Not doing so is a failure to understand that small business drives the economy and the future strength of our country depends on the viability of these same small businesses.