Rising Fuel Costs Burning Small Business
High gas prices are still impacting the nation’s small business owners, according to a new survey by the Small Business & Entrepreneurship Council. The survey, “Entrepreneurs & the Economy: Trends, Issues and Outlook,” found that 72% of business owners are feeling pain from prices at the pump.
"The fragile economy is being undermined by high gas prices. The weak recovery and policy uncertainties are already weighing on the confidence and minds of small business owners. Now they must find a way to cope with higher fuel costs. Unfortunately, their choices are limited," said SBE Council President & CEO Karen Kerrigan.
The survey, which polled 304 small business owners, was conducted by TechnoMetrica between February and March. According to the Energy Information Administration, the weekly average price for regular gasoline grew from $3.64 per gallon as of February 27 to $3.75 per gallon as of March 12.
Small businesses are cutting employee hours and/or raising prices to keep up with the affects of rising gasoline costs, according to SBE Council. In response to the question of how higher gas prices affect their role as small business owners, 41% said higher prices have affected their plans to hire, 22% have cut back on employee hours, and 40% have already raised their prices.
Even more startling, many small businesses are unsure if they will survive if gas prices continue north, as 43% of respondents agreed with the following statement: "My business will not survive if energy prices continue to remain high or increase further," while 23% strongly agreed with that statement.
"Very few businesses are immune from the negative effects of rising energy costs. As a result, entrepreneurs and managers have to make tough decisions, none of which are positive for their businesses, for workers seeking employment or worried about their current jobs, or for the economy in general,” said SBE Council chief economist Ray Keating.
Current financial stress levels of the entrepreneurs surveyed are also on the move: 38% of business owners report feeling more stress from three months ago, while just 14% feel less stress.
In spite of this, 42% believe their financial conditions will improve. Conversely, 42% are convinced that they will remain the same, while 13% project that their finances will get worse.
Kerrigan added: "The surge in gas prices underscores the need for the administration to move without haste on advancing pro-energy policies, including the approval of the Keystone XL pipeline. The U.S. cannot allow world events, supply disruptions and global demand surges to control the fate of our economy or global competitiveness. We must take full advantage of the natural resources we have been blessed with as a nation and move forward on a genuine 'all-of-the-above' energy strategy."