Small business owners say the pressure inflation is putting on their business is getting worse. The new survey released by the NFIB Research Center assessed the impact that inflation is having on small businesses in the US.
Small business owners say inflationary pressure is only getting worse
More than half (56%) of small business owners surveyed said inflation is having a significant impact on their business. More than a third (36%) of small business owners say inflation is having a moderate impact on their business, and three-quarters (75%) of business owners say the impact of inflation is getting worse. Only 1% of small business owners surveyed said inflationary pressure is easing.
The survey results are important because they show what specific issues small business owners struggle with the most. The research also shows what small businesses are doing to absorb costs and the important decisions they are making to maintain profits.
Commenting on the research findings, Holly Wade, executive director of the NFIB Research Center, said: “Inflation has set in on Main Street and landlords across the country continue to make business decisions in response.
“As landlords deal with the highest rate of inflation in decades, they are also dealing with labor shortages and supply chain disruptions, which are hurting their businesses and consumers.”
The cost of fuel is adding to the pressure small businesses face
The rising cost of fuel is proving to be a major concern affecting small businesses. More than three-quarters (79%) say the rising cost of gasoline, diesel and fuel oil is a major contributor to rising business costs.
Rising costs of inventory, supplies and materials also contribute substantially to increased expenses, said 72% of small business owners surveyed for the report. Labor is another substantial contributor to rising costs, with 31% of small business owners citing labor as a major pressure.
The NFIB Research Center survey asked small business owners how they are absorbing costs in the current climate of rising inflation.
A large majority (86%) said they are raising the prices of their goods or services as a means of fighting inflation. 7% of these small business owners said the effort was absorbing all of their total cost increases, 36% reported the most, and nearly half (47%) said they were increasing the cost of approximately half of their goods or services.
Another leading way small business employers are absorbing the costs of inflation is through lower business profits, with 82% reporting making these changes. 9% stated that absorbing all total cost increases.
Less than a fifth (17%) of small business owners have reduced the quality of materials or goods to absorb higher costs generated by inflation. 23% switched to a lower cost of materials or goods, such as inventory, supplies, to produce final products and services.
The survey also found that almost a third (29%) of small business owners take on debt to finance higher costs.
For the latest news, follow us on Google News.