Voice of Main Street: Rising gas prices and expenses squeeze small businesses

As the current affordability crisis is compounded by increasing fuel and transportation prices, Voice of Main Street, a quarterly opinion poll of entrepreneurs in Small Business Majority’s network, finds that 67% of small businesses report that their business expenses have risen over the past three months while half of small businesses report decreased revenue over the same period. 

The poll reveals that skyrocketing gas prices pose a financial challenge to small businesses: A whopping 74% report that they are being impacted by recent increases in fuel and transportation costs. Other business expenses also continue to rise, limiting the growth potential of small businesses. Entrepreneurs report that utilities (88%), the cost of raw goods and materials (88%), healthcare premiums (89%), and commercial rent (72%) have increased this year. 

Fuel and transportation costs take a toll on small businesses

Small businesses are also feeling the impact of many consumers tightening their wallets. More than half (57%) of entrepreneurs are experiencing a slowdown in customer growth, and 63% report decreased profit margins this year. Only 5% report they have seen no change in costs or business conditions. As a result, many small business owners are making difficult decisions to stay afloat. They’ve had to increase prices of goods or services (65%), delay business investments (43%), freeze hiring (34%) and lay off employees (11%).

More small businesses are becoming pessimistic about their business prospects as surging fuel prices and other climbing expenses strain their bottom lines. It’s imperative that the administration and congressional leadership act soon to address these worsening business conditions for our nation’s job creators before we see even more instability on Main Street.

Additional key findings

• Less than half (43%) of small businesses are optimistic about their business prospects over the next six months. 
• Revenue has declined for half of small businesses and increased only for 14% of small businesses.
• Rising fuel and transportation costs have impacted 74% of small businesses.
• About one-quarter of entrepreneurs have paid tariffs on imports for their businesses and not a single business in our survey has received a refund through the Consolidated Administration and Processing of Entries (CAPE) portal. The vast majority (64%) of businesses that paid tariffs had not yet applied for a refund while 7% have been denied a refund and 3% are still awaiting one.
• In the past six months, 28% of small businesses have applied for capital from a financial institution, with 11% of entrepreneurs receiving a loan.
• Being able to access capital shapes how small business owners feel about the future. Among those who received a loan, 65% are optimistic about their business prospects and only 30% are pessimistic. Among those who were denied, only 32% are optimistic and 50% are pessimistic.