Will the Rising Cost of Gas Become Your Biggest Expense?

As a business owner in the United States, how has the price of gas affected your business?

And how is it affecting your customer’s buying decisions?

Some U.S. businesses have put plans in place to address the issue. Dodge has a program called Refuel America which guarantees a price of $2.99 for the first 12,000 miles with the purchase of a new car. Donatos, a U.S pizza chain, ran a special promotion in Cleveland, Ohio where they deducted the price of a gallon of gas from your pizza purchase if you just brought in your gas receipt.

As a freelance writer, I am now questioning the need to meet in-person with a prospect rather than conducting the initial interview over the phone.

Has the price of gas influenced how you do business or what you offer your customers as an incentive? And how do you get costs of operating a vehicle, under control?

Let’s look at company cars. Do you provide vehicles for your employees or do you pay for their gas expenditures? Ned Averill-Snell recently wrote a guide to Automotive Purchasing for Business. Ned offers a few unique ideas like buying vehicles at auction for those providing employees a car. He also offers suggestions on auto financing. But the simplest suggestion he offers is bringing new life to worn vehicles with something as simple as a car seat cover. If the engine still works and the tires have tread, why trade in a car because of ripped seat covers?

How about the expensive of operating the car? Betty Stark has a Guide to Mileage Deductions for Business Travel. Betty talks about ways to make the most of your mileage deductions and her best advice — which many neglect — is keeping great records for the IRS. I use a regular pocket calendar. I keep the calendar in the driver’s side pocket and each morning I write the starting miles, the names of the companies I plan to visit and any car expenses I incur during the day. I enter the information in a spreadsheet which my accountant uses at the end of the year. If I didn’t write the information down each day — it would be nearly impossible to recreate at the end of the week or month.

So what is the current IRS mileage deduction? It was raised to 50.5 cents per mile for 2008. That’s a huge increase since the 36.5 cents per mile in 2002, but is it enough? If gas surpasses $4.00/gallon this year in the United States (as of today it already has in a few larger cities) will that be enough to cover gas and car maintenance? How can you stretch the gas further to meet your needs?

Jacqueline Mitchell wrote an article that appeared in the LA Times entitled Sneaky Ways to Get Better Gas Mileage. She offers 10 Sneaky Ways to Save on Fuel, but she offers one non-sneaky way we can save starting today:

One immediate step a driver can take is observing the speed limit. Aggressive drivers can save as much as 49 cents per gallon if they ease up on the gas and brakes, according to the Car Care Council. You can save about 10 cents a gallon by observing the speed limit and using cruise control during highway driving.

As a small business owner, is the rising price of gas now eclipsing the pain of rising healthcare costs? Daniel Kehrer has put together a guide for Coping with High Gas Prices geared toward the small business owner. He offers the obvious “pay as little as possible for gas and take advantage of discounts” but he also talks about saving money with more efficient scheduling:

Pay attention to scheduling. Many small businesses can save money by doing a better job of scheduling trips to visit clients or run errands. Group stops and appointments so you don’t end up going back and forth to the office three or four times a day. And if you can accomplish more of your business by phone or online, avoid the driving altogether.

No matter your strategy — we need to turn a fiscal eye toward the cost of gas for our employees and our customers.

What have you done already to control gas costs for your organization? Is there a way you can save the price of gas for your customer? Please share your tips here! Thanks.

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