Businesses mark up prices as a result of heightened demand. However, with the rising oil and food prices driving inflation, small business owners must increase the price of their goods and services to cover higher costs.
Even with the unemployment rate up and wage costs sinking, businesses still see costs rising. Prices have increased 5 to 10 percent for restaurants, retail establishments and other businesses tied to the food and oil industry.
To lower costs, small businesses in the service industry should outsource backend labor to states with rampant unemployment and low wages like Florida and Michigan. Also, small businesses that export goods and services can effectively take advantage of the increased competitiveness that the falling dollar has given American companies.
Small business owners who can uphold service standards during the economic slowdown will successfully capture market share. Read more about how to protect your business and personal portfolio during the recession in a recent blog post.