About 40% of U.S. small businesses intend to raise selling prices by 10% or more amid decades-high inflation, according to a survey from the National Federation of Independent Business.
Overall, more than two-thirds of the respondents plan to increase prices in the next three months, according to the survey, conducted between April 14 and April 17 among 540 business owners. Almost half of the small firms are planning increases of 4% to 9%.
The report suggests that many businesses are planning increases that are above the current rate of national inflation — the consumer-price index rose 8.5% in March, the most since 1981.
Nearly nine in ten employers in the NFIB survey said they’ve had to raise prices to absorb some of the costs.
Inflation started to show up as an issue in the survey in the summer of 2021, the NFIB said, and it’s a novel challenge to entrepreneurs who started a business after the 1990s.
The NFIB found that price increases are having a “substantial” impact on 62% of the respondents and a “moderate” impact on almost a third of them. No one said inflation had no impact on their business.
Small employers have few options at their disposal other than passing higher input costs on to customers, according to the NFIB, a trade association that defends the interests of small businesses.
In the survey, the main drivers of higher expenses cited by owners were the cost of inventory, supplies and material, as well as fuel.