By Ryan Velez
As a small business owner, things can go wrong for your operation in ways you can’t even fathom (until they happen). Sometimes these are due to poor decisions on your part, but they can also take place for reasons completely out of your control. One such example is rising gas prices across the country. Black Enterprise put out a recent article with insight on what’s behind the prices, what they mean for businesses, and how you can prepare.
Tamra Johnson, an AAA spokeswoman, explains that the rising prices are mainly due to an oversupply of gasoline and weaker demand for the fuel. She adds that businesses should prepare to pay more for gas this summer than they did last summer, due to stations switching from winter to summer blends, higher demand, and of course, the price of oil. One major impact that has yet to be determined is a key decision from OPEC nations, a group of countries that export petroleum. “If OPEC decides at its June meeting to extend their current agreement of production cuts, we could see prices move slightly higher or remain the same,” she says. “If they decide to end the agreement, we will see prices decline,” she shares.
From florists to pizza franchises to moving companies and even online grocers, many businesses stand to be hurt by rising gas prices. W. Randolph Lee, president & CEO of Raven Transport, No.39 on the BE 100s Industrial Services Companies list with $88.7 million in revenue, notes that transport companies are hit hard when gas prices rise. Not able to pass the higher cost onto customers, he is trying to minimize trucks operating with no freight, but the bottom line is still being impacted. “If diesel fuel costs continue to rise, that will definitely have an impact on our profitability,” Lee says.
With this said, no matter what the scale of your business, there are a few things you can do to try and weather the storm. A lot of this goes into preplanning your driving needs for business. For example, figure out ways to combine multiple errands into one trip, as starting several short trips can use much more gas than one longer one. Maintenance is also important. Info from the U.S. Department of Energy says that keeping your tires properly inflated can increase fuel economy by up to 3%. Keeping on track with your recommended maintenance schedule can improve fuel economy as well.