By MADDISON BOOTH, Alabama Daily News
MONTGOMERY, Ala. – The National Federation of Independent Businesses’ Research Center recently released a survey showing that most small business owners are countering some of the costs of inflation by raising their prices.
“Our members here (in Alabama) say inflation and increased labor costs are driving down any profits for the business,” Rosemary Elebash, NFIB Alabama Director, said in a press release. “And when the business loses profit, it affects community involvement and contributions to local charitable causes.”
The survey was conducted from June 31 – July 7, 2022, using a random sample of 462 business owners.
The NFIB did not have state-specific statistics, but survey results showed that 75% of small business owners throughout the country said inflation pressures are worsening.
The survey also found that 71% of businesses surveyed raised prices in the past three months. Seventy percent said they plan to raise prices in the next three months.
Elebash explained the various challenges inflation is presenting to all types of businesses in Alabama. She said grocery stores and restaurants are facing shortages of certain foods as well as increased transportation costs for those deliveries, and retail shops are now only buying items they are certain their customers will purchase.
Elebash said she spoke with a homebuilder who said due to the constant fluctuation of material prices, he can’t provide customers with quotes on building houses anymore.
The majority of respondents in the NFIB survey named fuel and “inventory, supplies, and materials” as big contributors to their higher operating costs.
There are other methods besides increasing costs that businesses are attempting to use in order to continue making profits. Twenty-three percent of businesses surveyed are using less expensive materials, 17% are lowering the amount of inputs used to make their final products and 31% of small employers are reducing employee related costs, such as compensation, number of employees and hours worked.
The NFIB said in its survey results that inflation became a major concern for small businesses in the summer of 2021.
“Small business owners will continue to push forward to make their business a success for their employees and customers,” Elebash said. “Many business owners have faced past recessions, survived the 1970s higher interest rates, and they have succeeded in spite of economic downturns. Small business owners are tough cookies, and they are committed to their communities.”