Detroit City Wire

Murphy’s Naturals, a small business specializing in mosquito and tick repellent products, is facing increasing challenges as the government shutdown continues. The company, founded by veteran Philip Freeman in Raleigh, North Carolina, relies on the U.S. Environmental Protection Agency (EPA) to approve its product labels. With the shutdown, these approvals have halted.

Freeman, who also serves on the U.S. Chamber Small Business Council, expressed concern about the growing backlog at the EPA. “We may not feel it right away, but the backlog that is generated by the shutdown will last long beyond when everything is cleared up and there’s no longer a shutdown,” Freeman said. “That means that the existing backlog of labels submitted to the U.S. EPA for approval will be more extensive and take even longer to clear.”

He identified two main problems caused by the shutdown: uncertainty in operations and the risk of lost sales. Freeman explained, “When we commit to deliver products to our retailer customers by a certain date, but we don’t really know if we’re going to actually be able to do that, it’s a big concern because there can be penalties imposed on our company for late delivery, or worse, the potential cancellation of purchase orders.” He added, “It also means lost sales because if your product’s supposed be on the shelves in March, but it’s delayed a month to April, that’s an entire month of sales that are lost during a really important time of year that you can’t get back. As a seasonal business, you can’t make up for lost sales.”

Freeman called on policymakers to resolve the budget impasse. “Do your very best to put the rhetoric aside. If it’s not a helpful conversation, set it aside and get things done,” said Freeman. “Solve for the problem that exists, get it done so that America can move forward and operate, because we’re depending on our policymakers to get things done.”

The effects of government shutdowns on the broader economy have been significant in the past. During the 2018 partial government shutdown, economic output fell by $11 billion over two quarters, with $3 billion never recovered.

Tom Sullivan, Senior Vice President of Small Business Policy at the Chamber, has outlined how shutdowns affect small business contractors, access to Small Business Administration loans, and business travel.