SOURCE: International Profit Associates

September 17, 2008 13:38 ET

Small Businesses Raise Prices to Offset Inflationary Pressures, Increase Shipping and Handling, Says Latest Small Business Research Board Study; Economic Conditions Main Concern

BUFFALO GROVE, IL--(Marketwire - September 17, 2008) - Small business owners and managers in the U.S. confirmed they are raising prices and increasing shipping and handling fees in response to inflationary pressures. In addition, 45% expect a worse economy and 27% 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 economic conditions and energy/fuel costs are tied as the issues business owners believe are having the greatest impact on their businesses. They expect the general economy to drastically worsen in the next 12 months based on the previous outlook. The second quarter poll was co-sponsored by International Profit Associates.

Meanwhile, the quarterly report said 59% of businesses are feeling inflationary pressures. 65% of those businesses have raised prices in response to the increasing inflationary pressures. For those businesses adjusting, 23% have already added or increased shipping/handling fees and 21% have chosen to reduce other operating costs. Renegotiating customer pricing agreements was the fourth mentioned possibility for offsetting costs with 15% negotiating long-term fixed cost supply contracts and 12% reducing lead times.

Economic conditions and energy/fuel costs have taken over as the top issues that owners and managers feel are currently having the greatest impact on their small businesses. In the first quarter of 2008, increasing interest rates had the greatest impact. Currently, 26% of respondents believe economic conditions and energy/fuel costs are the 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 much lower levels of expectations for the next 12 months. Only 22% of the respondents indicated they intend to increase hiring the next 12 months, a decrease of 15 points from the 37% reported from the results of the second quarter 2008 survey. Of the participants, 45% said they believe the economy will worsen, 17 points higher than the last study. The current report also showed 40% of the businesses are projecting revenue increases, 12 points lower than the 52% reported from the first quarter 2008 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.

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