Small businesses nationwide are being hit by the interrelated challenges of rising inflation, supply chain bottlenecks and a tight labor market – but inflation is hitting small businesses particularly hard. small enterprises.

More than two-thirds of small business owners plan to raise prices over the next three months, while 31% said they check prices weekly to reflect market conditions, according to to an investigation of the National Federation of Independent Business.

“There are talks of price increases due to the strictly inflationary nature of our current economy,” Jon Hepner, co-owner of Prairie Rivet, a small manufacturing company in Wisconsin, told Yahoo Finance.

Hepner explained that he had raised prices twice in the past year, “It’s to some extent consistent with the direction the market is going, because we kind of simultaneously raised prices instead of waiting for inflationary pressures and then increase them”.

Hepner is not alone. To cope with higher prices, about 40% of US small businesses intend to raise their selling prices by 10% or more. According to the survey, 47% of small businesses expect increases of 4% to 9%. With inflation at its fastest pace since 1981, the report suggests that many companies are planning increases above the current rate of national inflation.

As small employers attempt to dampen inflationary pressures, eighty-six percent of small businesses are raising the prices of their goods or services. Of those who increased their prices, 8% said they were trying to absorb all of their total cost increases, compared to 30% who did so primarily for this reason.

The Federal Reserve has indicated that it plans to raise interest rates as a way to curb inflation. However, small employers still have few options available to them other than passing on higher input costs to customers, according to the NFIB report.

The top cost drivers cited by operators were the cost of inventory, supplies and equipment, and fuel. Inflation started to appear as a problem for small business owners in the summer of 2021, the NFIB said.

This is an unprecedented experience for those not in business in the early 1980s. The NFIB found that inflation has a substantial impact on 62% of respondents, while almost a third had an impact “moderate”. Meanwhile, no one said inflation had no impact on their business.

But these numbers only tell part of the story. Hepner explained that “finding a quality workforce” has been a challenge and called it a “big chunk” of his business.

“We interview so many different people for positions and a lot of them just aren’t what we’re looking for,” Hepner said. “It’s operationally difficult, I think for us, for many others I’ve spoken with, to keep up with the demand…with the scarcity and the manpower.”

Another obstacle, he pointed out, is “the ever-increasing costs of our raw material”.

“The cash flow to buy the right amount of raw material so far from the date that we’re going to consume it and then be able to create a customer for that or basically store more and more raw material than we don’t. ‘in planes in the past,” Hepner said. “And that really puts the cash constraint into perspective.”

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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