Monday, February 18, 2008

How Would You Like to be Taxed an Extra 39%?

I don't mean to scare all of you small business owners...but how would you like to be taxed an extra 39%?

That's how much gas prices rose last year alone. And it doesn't look much better for 2008.

President Bush stated at a conference on competitiveness, "Rising gas prices are like a tax, particularly on working people and small business people."

Soaring gas prices of $3.50 a gallon or more affects both individual consumers and businesses, but small businesses get hit the hardest. Small businesses often don't have extra cash lying around to cover rapid increases in their cost of doing business.

And worse, they are usually the last to get paid when their customers fall on hard times or have higher-than-expected bills.

And if small businesses are hurting, the economy suffers as well. Small business owners and their employees do most of the spending and investing in the U.S. Plus, they create 60 to 80% of the new jobs.

High gas prices put the squeeze on small businesses two ways.

1) It drives operating costs up

2) It cuts into sales by making potential customers cautious about spending money.

And eventually, small businesses are forced to raise their prices and pass along these increased costs to us - the consumers.

So what can consumers and small businesses do to fight this trend?

Look for more efficient ways to do business to keep their costs down.

One way small businesses can cut down on driving and traveling is to conduct more business online. Video and audio web conferencing has dropped significantly in price and the quality is much improved.

And the video conferencing trend is picking up speed. According to Wainhouse Research, it's growing at a pace of 24% per year and over half of small businesses are using it as a replacement for meeting in person to cut costs.

So even though the $3.50 price tag of gas takes a bite out of your pocketbook, there are ways to keep costs down and improve the way you do business


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