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The National Federation of Independent Business (NFIB), the nation’s largest small-business advocacy group, represents small businesses in a wide range of industries that are being affected by the price increases.
NFIB conducted a Small-Business Poll to determine how small businesses adjust to cost increases in energy prices. The research found that the primary concern for small-business owners focuses on three types of energy – gasoline, electricity and natural gas. More small businesses identified cost increases for gasoline as impacting their businesses (33 percent) than any other form of energy.
The single most important step taken to offset these increasing energy costs was reduced earnings. Seventy-six percent of small business owners claimed that the first step they took to compensate for their energy increases was to lower earnings or profits. Conservation actions were taken with the next greatest frequency (34 percent).
As small businesses continue to deal with high-energy prices, NFIB experts are available to discuss the data from the NFIB poll. A copy of the Small-Business Poll on Adjusting to Cost Increases is available at: http://www.nfib.com/object/sbPolls
Fast Facts on How Small Business Reacts to Energy Cost Increases
- Sixty-four percent of small-business owners surveyed report that they took more than one action to adjust to energy price increases; 31 percent took only one action.
- Specific actions taken to adjust for cost increases are strongly influenced by the size of the price increase, the amount of time the increase is known prior to its implementation, i.e., advance notice or knowledge, and the good/service whose cost increases.
- Between one in four and one in five small-business owners report that it is "highly likely" or "likely" that cost increases with no notice will force them to borrow or draw down on a line of credit to ease adjustment to a new cost structure.