Lagging consumer spending, the credit crunch, the housing meltdown, record oil prices and inflation are challenges for the most established large companies, let alone small businesses vulnerable to changing market conditions. But of all the troublesome economic news, inflation is what's most worrying to small business owners.

Small business is On Topic at FOXBusiness.com in August. Check back every day to read stories about how to start, build and enhance your small business.

According to a recent poll by the National Federation of Independent Business, inflation is the No.1 concern of small businesses. Inflation fears are at the the highest since 1982, said William Dunkelberg, the federation’s chief economist.

For small business owners, it’s difficult to know what tactic is best for coping with the increase in commodity costs. Passing costs onto the consumer guarantees business owners will be compensated for increased operating expenses, but higher prices could mean lower sales and possibly alienating customers if prices go back down.

Christine Kelly owner of TheHealthyBasket.com, which ships personalized gift baskets filled with healthy and organic food, said her costs have gone up significantly in the past few months since food prices and shipping charges have increased. But she's afraid to raise prices.

“There are certain price points where people will just do without things when they’re not a necessity,” Kelly said. “When you’re selling something like a gift basket that’s not a necessity, you have to really be careful with pricing.”

Kelly has tried to minimize her shipping charges by ordering more local food items to fill the baskets. 

Another industry that’s struggling is construction, said Kenneth Simonson, chief economist for the Associated General Contractors of America.

“I think construction has been hit harder than almost any other industry outside of transportation,” he said.

Simonson said high-priced diesel fuel is hurting contractors who use huge amounts to operate equipment and construction vehicles, and then have to pay fuel surcharges on thousands of deliveries to the job site for materials. Making the materials used in construction projects is also energy intensive, so materials like steel have shot up in price. Even labor costs have gone up, and Simonson said contractors have had little choice but to pass these increases on to the consumers.

Joe Lerario, owner of Fortis Concrete, a Bartlett, Ill.-based cement contracting company with about 20 employees, said he's had to charge his customers more.

“The guys who work for you are asking for more money to fill up their tanks, concrete costs have gone up at least 16%, and the price of asphalt went up 50%,” Lerario said. “We’re trying to be more efficient in the way we run the operation, but how much more efficient can we be?”

Anita Campbell, editor of smallbiztrends.com notes that not all industries are suffering, so it’s hard to say if this is permanent inflation or just a “commodities bubble”.

“I think in some of the commodity areas there has been some talk of those being caused by speculation. But certain parts of technology have come down in price, and I don’t see them going back up,” Campbell said. “I think prices are going to hold steady for both hardware and software—software is pushing toward free in many cases.”

As Campbell points out, some businesses are actually thriving in the current economic environment. Abigail Spankie, a Web site designer in Lake Orion, Mich., a suburb of Detroit, said her business has improved because she charges less than some major design firms. She said her expenses have hardly gone up at all.

“If anything they’ve gone down,” Spankie said. “I don’t have any shipping costs—my costs are basically my Internet hook up, and then stock photography on the Internet, which has just gotten cheaper and cheaper.

Still, Dunkelberg says the majority of small business owners are feeling the price pinch.

“Every time they open the back door the prices have gone up,” he said. “If you run a restaurant the eggs are double, there are surcharges for delivery for energy costs—it’s just a tough environment.”

Lerario of Fortis Concrete said in addition to increased material costs, his company has to work harder just to get the same amount of business they had last year. But he’s still optimistic about the future of his company, despite the prevailing fear of inflation.

“As much as it hurts our pocketbook, in the long run if we can survive it it will make us better,” Lerario said. “Because you are using different strategies to deal with this, it forces you to improve yourself. You just have to just roll up your sleeves and say ‘how can I make my business better?’”