Phil Castle, Business Times

Entrepreneurs who led their operations through a pandemic now face additional challenges from labor shortages,  inflation and burdensome regulations, according to the leader of a small business advocacy group in Colorado.

“They’re doing good. They’re working harder to maintain,” said Tony Gagliardi, state director of the National Federation of Independent Business in both Colorado and Wyoming.

They also should tell their stories, he said, especially to the state and federal officials who craft the policies and laws that affect small businesses. “They’ve got to tell their stories and get more active in the legislative process.” 

The NFIB helps in lobbying on behalf of small business owners and their interests at all 50 state capitols and Congress, Gagliardi said. The NFIB also conducts research, including a monthly membership survey used in part to calculate a measure of small business optimism. In addition, the organization operates a legal center.

Still,  there’s nothing more convincing than small business owners talking to their elected representatives about a given issue, he said.

Gagliardi works out of an office in Denver, but came to Grand Junction to meet with local NFIB members and state legislators. The meeting coincided with an effort to recruit more members.

Nearly 250 of the more than 6,200 NFIB members in Colorado come from Mesa County, he said.

“I always enjoy Grand Junction,” he said. “It’s a place where you can breathe easier.”

It’s also a place he said confirms an important point: “Small business is the backbone of the community.”

While NFIB membership dropped during the COVID-19 pandemic as some businesses closed, Gagliardi said the numbers have rebounded as additional challenges arise. “That’s because small businesses see what’s coming their way. They’re paying attention.”

Labor shortages and inflation pose challenges, he said. Some restaurants, including longstanding operations,  have closed because they can’t hire enough employees to remain open.

Add to that problems associated with higher prices for fuel, supplies and materials, Gagliardi said.

The Consumer Price Index, a broad measure of everyday goods and services related to the cost of living, rose 9.1 percent between June 2021 and June 2022. That marked the fastest pace for inflation going back to November 1981.

Fully 79 percent of NFIB members nationwide responding to a survey conducted by the organization reported rising fuel prices contributed to higher prices they charge for goods and services, and 72 percent said higher prices for inventories, supplies and materials contributed to higher prices.

“Small businesses are not only suffering the ill effects of inflation and fuel prices nationally, but in Colorado the problems are compounded since a large part of the state’s energy production has been shut down by the current administration and unelected commissions,” Gagliardi said.

“The food service sector’s price of product is escalating at alarming rates in addition to the severe lack of workers,” he said. “And, to add insult to injury, some cities are tacking on local sales tax to an already questionable retail delivery fee.”

Then there’s the uncertainty associated with additional laws and regulations, he said. “You’re always waiting for the other shoe to drop.”

The NFIB gave Colorado lawmakers a collective D- for their latest session.

Three bills deemed highlights of the session provide a workaround on the federal cap on state and local tax deductions, an extension of the period businesses can begin using destination source rules on sales and use taxes and a temporary reduction of commercial and residential property tax assessments.

But six bills deemed bad and ugly included measures on wage theft, more environmental regulations and a bill making it easier to sue employers.

Regulations pose a disproportional burden on small businesses that pay more per employee to comply than large businesses, Gagliardi said.

An analysis conducted by the National Association of Manufacturers found that small manufacturers with fewer than 50 employees incur federal regulatory costs of $34,671 per employee per year, triple the cost born by the average U.S. manufacturer.

Yet, small businesses play a collectively big role in national, state and local economies, Gagliardi said. “They’re the engine that drives the economy.”

For more information about the National Federation of Independent Business in Colorado, call
(303) 831-6099 or visit the website at www.nfib.com/colorado.