Will the Rising Cost of Gas Become Your Biggest Expense?





Rising price of gas - how does it affect your business?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.

20 Comments ▼

Deborah Brown



20 Reactions

  1. I think it’s very smart to do the majority of business over the internet. It may be a little less personal but I think your clients/customers will appreciate not having to use the gas to meet you. I think more and more companies will encourage their employees to work from home instead of coming into the office. That will save the employer not only gas expenses but utility costs and office costs.

  2. Anita Campbell

    My biggest gas saving tip has come from running a business that is 80% Internet-based. Nothing like that for saving on fuel and vehicle maintenance costs. There are days when I can’t get unchained from my computer long enough to go anywhere. ๐Ÿ™‚

    However, to save money on gasoline, here are a few tips I follow:

    (1) I shop for groceries at a store that offers points which can be redeemed for a Marathon gas card.

    (2) I watch which day of the week I gas up. Gas prices fluctuate by day of the week. Tuesdays are often good, with gas prices lower than other days in my area.

    (3) A local gas station offers premium gas for the price of regular on Tuesdays. If you have a vehicle that requires premium gas (as many do) this is a way to save money.

    Anita

  3. I have a friend that was recently allowed to start working from home as opposed to going into the office daily. Even if you cut down to going into the office only 2 days a week – I think that’s the biggest thing you can do to help your employees. I have a gas guzzling Ford Expedition – thank goodness I work from home! I feel very fortunate about that.

  4. Deborah Chaddock Brown

    Chris – your mention of your car makes me wonder: is anyone making an early change to their current vehicle because of the rising gas prices? I read a comment this weekend while helping my daughter with an air pollution report that you need to operate a car that gets at least 35 miles to the gallon to help reduce air pollution. Egads – I have a van that I’m lucky if I get 19 MPG. What’s a driver to do?

  5. MarketingDeviant

    Internet helps eliminate gas cost! That or start taking the bus to save cost.

  6. The article you linked to by Jacqueline Mitchell is just…wow. If ever there was a definition of a fluff piece, that’s it. She looked up some fuel saving tips on fueleconomy.gov, and talked to the “Car Care Council” which is made up of people who benefit from telling you to replace various bits of your car on a regular basis.

    Ugh.

  7. Mark Anderson

    Other than the occasional drive to the post office, this is thankfully one price hike I’m somewhat more immune to. Now If I could just stop those postage hikes…

  8. There are some snazzy Internet tools to help with virtual meetings, generating sales leads and whatnot. Some businesses might also be trying different ideas to optimize how they store and move their inventory. And I’m sure everyone is trying to cut back on driving!

    However, at risk of sounding too wheeler-dealer, I’m still feeling like there’s some great opportunities for small businesses in high gas prices. Chances are, there’s probably some way your product or service can help people save more money, conserve resources, travel less, save the planet etc. As long as it does so more than your competitors, I’d say it’s a great selling point…

  9. Brent Leary

    I wrote about this back three years ago when the gas hit the “ridiculous” amount of $1.75 a gallon…. oh how I long for the good old days. Gas prices and traffic here in Atlanta forced me to be extremely selective about when I got in the car for a meeting. Basically I’m only going the extra mile (literally) after a whole lot of virtual screening to make as sure as possible that there is a good opportunity that I can win. Thank goodness for SaaS!

  10. While not directly applicable for transportation fuel – for heating, and the reduction of natural gas usage, http://www.solarwall.com – WalMart, FedEx,US Army, 3M, +many more etc all use their solar air heating solution with pay backs as low as 3 years… I can guarantee we will see more of this as natural gas prices continue to escalate, and the ROI gets even more attractive.

  11. I agree with Anita – I can’t beat my commute – 150′ walk to my office on my property! I can ride my bike into town for banking and the post office if need be. The internet has provided immense freedom, profits and very little commuting. Now if i can just get my kids to home school…!
    david

  12. Martin Lindeskog

    Martin Lindeskog

    It is time to take back the oil that belonged to Western companies in the Middle East. How about start drilling in Alaska and do more business with Norway? You could get oil from sand in Canada.

  13. I have an SUV and I never thought I would ever go back to having a car. If these gas prices don’t change, it looks like that’s where I’ll be heading. ๐Ÿ™ The compact car with the best gas mileage and smaller car payment.

  14. Ivana Taylor

    My new computer has a web cam and while I’m not a web cam fan — I’m seriously thinking about buying one for some of my clients with a note that says “let’s start seeing each other” ๐Ÿ™‚

    I really struggle with balancing face-to-face time with technology. I love them both. So I’ve been asking myself the question – in what types of interactions is face-to-face time critical? So far, this is my list:
    – Referral meetings (first time)
    – Closing the deal with a client
    – Project definition
    – Milestone meetings

    As I write this list, I’m noticing that face-to-face time is critical when we need the benefit of body language to iron out critical details and expectations.

    What do you guys think?

  15. Gas prices are going to be the fall of alot of small biz owners this summer.
    I run a small moving company in the dallas/fort worth area and even running my trucks in the local metroplex we still consume 90-125 gallons of diesel fuel per day.

    at the current diesel price of 4.79/gal thats $431.10-$598.75 per day JUST in fuel.

    What will America do when truckers and biz owners that depend on fuel to take care of there customers do when we just CANT do it anymore?

    Can you imagine going to a wal-mart and seeing nothing on the shelves?
    Walk into a pizza place to order a pizza to only find out they could not get a truck in to re-stock the supplies?

    this is minor stuff, what happens when local law enforcements cut down on the number of police driving around the city to help cut fuel costs?

    God help us all.

  16. Deborah, to answer your question – I would consider changing my vehicle if I had to travel to work, but I dont. Plus, I need my vehicle for hauling and whatnot regarding a piece of recreational property I own – that’s becoming very expensive to even travel to and enjoy! Agghhh!

  17. I would guess that telecommuting is going to become much more popular for businesses of many sizes. There are some situations where you still need a “live” person to carry out the duties of a certain job, but as we know, many services can be done from any location with Internet connectivity and a telephone line. Wait until gas gets to $6-7 a gallon and people who were just barely scraping by at $2 a gallon lose their jobs…

  18. Martin Lindeskog

    Martin Lindeskog

    Ivana,

    I will send you a video email message that demonstrates a way of audiovisual conversation.

  19. I run a small business and gas costs are definitely a factor. I was not really aware how much of a factor until last summer. Obviously I want to protect my business this time around so I signed up with this firm petrofix.com. Although it is not the perfect solution, since it does not match my costs exactly, it is a pretty close match. Now I won’t be too worried this summer about having to add a fuel cost surcharge.

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