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Growth Stunt

Rising costs have put a damper on small-business hiring.

By Mark Henricks

Opinions expressed by Entrepreneur contributors are their own.

"The economy certainly is not overheating in thesmall-business world," says Michael Alter, president ofpayroll service firm SurePayroll. The Skokie, Illinois,company's latest quarterly report on small-business payrolls,released in April, suggests Alter may be understating the hiringchill that's currently gripping entrepreneurs.

Year-to-date growth in the SurePayroll Hiring Index, whichmeasures changes in small-business size, is less than one-half ofone-tenth of a percentage point. Alter says the rising costs ofcapital and fuel have made small employers cautious. Interest ratesare double what they were one year ago, he notes, and fuel costshave skyrocketed, while business owners' ability to raiseprices is limited. "Your prices are fixed, your costs are allgoing up--it's hard to hire people and grow," he says.

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