Rising gas prices takes toll on small businesses

3/8/2011

Gas prices in many areas around the country are on the rise, with fuel in some major cities costing upward of $4 per gallon. As Gather recently noted, this is causing many consumers to tighten their purse strings, hurting the bottom lines of small business owners.

Higher gas prices take more money out of consumers' paychecks, leaving them with less disposable income. This means they are less willing to go on shopping trips, as they have to carefully monitor their bank accounts to afford fuel.

It's affecting business owners in another way as well - transportation costs. "The spiraling costs of transporting goods from one point to another are shrinking already slim profit margins and pushing many small business owners to raise their prices. In today's economy, with many consumers still reeling from the recession, higher prices can have a devastating impact on sales," the source explains.

Fortunately, small business lending is becoming more viable for many entrepreneurs, which may help them stay afloat, despite rising costs.