SOURCE: Small Business Research Board

May 08, 2008 10:05 ET

Small Businesses Raise Prices to Offset Fuel Costs, Reduce Business Travel, Says Latest Small Business Research Board Study; Interest Rates Main Concern

BUFFALO GROVE, IL--(Marketwire - May 8, 2008) - Small business owners and managers in the U.S. confirmed they are raising prices and reducing business travel in response to higher fuel costs, yet 42% look toward an improved economy and 31% expect no change in the economy in the next 12 months, according to the latest Small Business Research Board (SBRB) study released here today.

The quarterly nationwide SBRB poll indicated that although interest rates are the single issue business owners believe have the greatest impact on their businesses, they expect the general economy to improve slightly in the next 12 months based on the previous outlook. The first quarter poll was co-sponsored by International Profit Associates.

Meanwhile, the quarterly report said 41% of the businesses have raised prices in response to the increase in fuel costs. For those businesses adjusting to an increase in fuel prices, 20% have already reduced business travel and 18% have experienced a higher level of just-in-time ordering. Eliminated routes, or the reduced length of delivery routes, was the fourth mentioned possibility for offsetting costs with 17% reporting the change in routes and 14% committing to vehicles with better miles per gallon efficiency.

In an unexpected change, interest rates have taken over as the number one issue that owners and managers feel is currently having the greatest impact on their small businesses. In the fourth quarter of 2007, the ability to obtain capital had the greatest impact. Currently, 32% of respondents believe that interest rates and the ability to raise capital are top issues impacting their businesses.

More than 1,000 owners and managers participated in the study.

Small business owners and managers throughout the U.S. reported slightly higher levels of expectations for the next 12 months. Only 37% of the respondents indicated they intend to increase hiring the next 12 months, a slight increase of 13 points from the 24% reported from the results of the fourth quarter 2007 survey. Of the participants, 42% said they believe the economy will improve, 13 points higher than the last study. The current report also showed 52% of the businesses are projecting revenue increases, 4 points higher than the 48% reported from the fourth quarter 2007 survey.

The Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations. The SBRB conducts these studies for the benefit of small business owners and managers. The SBRB also provides opportunities for third parties to gain real time insight into the attitudes of small businesses nationwide through the independently conducted research.

The universe of participants is developed from among small businesses across the United States. The SBRB study is a voluntary survey conducted via phone and e-mail. The latest information about the Small Business Research Board can be found at www.ipasbrb.com.

International Profit Associates, Inc. (IPA) is the largest privately-held provider of management consulting services to small- and medium-size businesses in North America. IPA, based in Buffalo Grove, Ill., and its more than 1,800 professionals offer a wide range of proven and innovative methodologies to help businesses grow and prosper regardless of the economic cycle. IPA either provides directly, or through its affiliated companies, a comprehensive array of business advisory services, tax and estate planning services or merger, acquisition and other financial advisory services in the United States and Canada. More information about IPA can be found at www.ipa-iba.com.

For more information about this poll, results of previous studies or other matters related to the SBRB, please contact Jennifer Cumbee, (847) 495-6786.

Contact Information

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    Jennifer Cumbee
    International Profit Associates
    847-808-5590
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