The National Federation of Independent Business (NFIB) released a new survey that examines the impact inflation is having on small businesses.
The survey, conducted by the NFIB Research Center, found that increasing numbers of small business owners reported inflation as their single most important problem. In March 2022, inflation overtook labor quality as the top business problem for small businesses.
“Inflation is a new challenge for most small business owners,” Holly Wade, executive director of NFIB’s Research Center, said. “Inflation has reached levels not seen for the last 40 years and is dominating business decisions for small employers across the country. Small business owners have been adjusting business practices in order to compensate for the inflation pressures resulting from supply chain disruptions, staffing shortages, and rising gas prices.”
The survey revealed that all small employers reported inflation was impacting their business to varying degrees. About 62 percent reported that inflation is having a substantial impact on their business while about 31 percent reported it had a moderate impact. Only 6 percent of owners report it having a mild impact.
The business owners said that inventory, supplies, and materials and fuel are the top contributing factors to higher costs in their business.
To absorb inflation costs, 86 percent of small employers are increasing the price of their goods or services while 84 percent reported experiencing lower business earnings to some degree.
Further, 68 percent of small employers are planning to raise average selling prices in the next three months and 22 percent were not sure. Also, 40 percent reported they would raise prices by 10 percent or more and about 47 percent reported between 4-9 percent.
Also, 99 percent of small employers reported the recent increase in gas and fuel prices is having some degree of negative impact on their business. About 48 percent said it has a substantial negative impact, while 35 percent said it has a moderate negative impact. Finally, 16 percent called it a mild negative impact, 1 percent said it has a positive impact, and 1 percent no impact.
The survey was conducted from April 14-17, with 540 responses collected.