Coping with Higher Gas Prices
Like most small business owners, chances are you and your employees are struggling to keep up with the rapidly escalating cost of gas. While there is little you can do about the upward trend in prices, there may be steps you can take to reduce the impact that the rising cost of filling up is having on your bottom line.
Here are some tips for minimizing the effects of gas price inflation on your business:
Switch to more fuel-efficient vehicles. If you have a fleet of vans, SUVs, or other vehicles that use a lot of gas, now may be the time to trade them in for more fuel-efficient alternatives. If hybrids are out of your price range or hard to obtain in your area, consider downsizing to the smallest vehicles that would meet your needs. Lighter cars are not only easier on gas; their lower sticker prices may also prove to be easier on your budget.
Plan trips in advance. Encourage your employees to plan their routes carefully before driving to meet customers or make deliveries. Using Global Positioning Software (GPS) can help drivers identify the shortest and most fuel-efficient routes. Remind employees of the importance of booking appointments with the goal of minimizing the number of trips they need to take, especially to more distant locations. If it appears that certain employees are using more gas than is necessary, offer to help them map out more efficient routes.
Find alternatives to driving. While sales representatives sometimes need to meet with clients in person, it may be possible to conduct certain types of the business over the phone, by e-mail, or even by webcam.
Encourage more fuel-efficient driving practices. Remind employees that there are things they can do as drivers to reduce the amount of gas they burn on a given trip, including slowing down, accelerating gradually, and turning off the air conditioner.
Research low-cost gas retailers. Find out whether there are certain gas stations in the area that offer consistently lower prices, and instruct your drivers to fill up at these stations. There are websites that can help you track the lowest prices for gas in your area.
Set a gas budget. Monitor your company’s gas consumption over a certain period of time to better identify how many miles are being driven and how much gas is being purchased. Based on this information, establish targets for the amount of gas each employee is expected to use. While drivers may sometimes have good reasons for exceeding these targets, having limits in place will encourage employees to conserve.
Communicate with employees about commuting costs.The extra money employees are having to spend to get to work is not only taking an increasingly large chunk out of their paychecks; it could also influence whether they will stay with their employers. A recent survey conducted by Florida State University’s College of Business found that, with gas at $3.50 a gallon, 45% of workers with a commute of at least 15 miles reported that rising gas prices are causing them to fall behind financially, and one-third said they would consider quitting their current job if they could find a position closer to home.
Organize a meeting or speak individually with employees about the impact rising gas prices is having on their commuting expenses. Whenever possible, encourage employees to carpool, take public transit, cycle, or walk to work. If your company is too small to make carpooling practical, think about getting together with other employers in the area to create a carpooling or vanpooling system. To minimize the amount of miles employees have to drive to get to work, consider allowing those who can to telecommute or to adjust their schedules so that they have to make fewer trips to and from the workplace.
Raise prices or levy extra delivery charges. Customers are aware of gas price inflation; they are unlikely to bolt to the competition because of a minor increase in prices or a small additional charge for delivery. If you are uncertain about whether the market will bear these hikes, find out whether your immediate competitors have raised prices, or ask a few trusted customers whether they believe the increases you are considering are reasonable.
