Saturday, February 16, 2008

Inflation, and the Small Business Owner

Small business owners have many things to worry about. From competition with the big boys to individual health insurance. Some have big issues with inflation.

We all have issue with the rise of gas prices in recent years, but what of the small businesses that use durable goods to produce their products. John Gaines, president and co-owner of Subminiature Instruments, a million-dollar manufacturing company in Ogden, Utah, Gaines says he pays almost twice as much for steel, electrical wire and copper as he did a year and a half ago. "We saw a spike in many of our products," says Gaines, 31, who believes inflation may become a bigger economic threat and drag on his family's investment portfolio--63 percent stocks and 37 percent bonds. "[Prices] have been pretty flat over the past seven years, so I expect [inflation will] hit sometime." He says his risk tolerance has dropped considerably over the past few years since getting married and having a baby.