Small business dilemma: Raise prices or absorb inflation?

NEW YORK — While inflation overall has been tame the past few years, many small businesses nonetheless have seen their costs rise, especially for labour and energy.

And economists believe we’ll see an acceleration of price increases this year. That will put more pressure on small businesses that don’t have the big revenue cushions larger companies do to help absorb costs.

Economists say many small businesses will be forced to pass on higher costs to customers — something many business owners have been reluctant to do. As the owner of a Florida-based trucking company put it, “No one wants to be the first in the industry to raise rates and then look like the bad guy.”

Some small business owners say for now the difference is coming out of what they take home.