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Avoid gas pain with planning and communication

"Where's the pain?"

As we discussed recently, this is the newest question to get to the point of what's preventing a business from accomplishing its goals. It's an important question. Because when pain occurs, like when expenses get out of control, it's essential to quickly identify and reduce that pain.

There are two kinds of out-of-control expense pain:

1) The kind that happens because you aren't managing your business properly;

2) The kind over which you have limited control. Today, we're going to talk about the latter -- specifically, the painful cost of petroleum.

For more than two years, one of the areas of pain for all marketplace participants, from consumers to conglomerates, has been the breathtaking price of petroleum. Accuracy demands the acknowledgment that, in inflation adjusted terms, the price of crude oil is actually still way below the highs of the late 1970s. But that's cold comfort with gasoline well over $2 a gallon and no relief in sight.

As you may know, a significant part of the price of oil is associated with the dynamics of supply and demand for both crude and refined products. But here's the rest of the story: Economists and industry experts say that the greatest reason for the increase in oil prices today is due to market speculation, which is significantly influenced by geopolitics. And the recent capture of British sailors by Iran has produced the crisis-du-jour resulting in instantaneous global price spikes.

In a perverse way, price increases due to speculation is kind of good news, because one of the things we know about marketplace speculation of anything is that it's particularly susceptible to Newton's Law of Gravity -- what goes up will eventually come down.

So, what can small business owners do to cut their fuel bills? Here are a few ideas.

Since oil prices are expected to remain at this level or higher indefinitely, you must dial those numbers and possible increases into operating expenses and adjust prices upward wherever you can. Even if you have fixed-price contracts, I promise you won't be the only vendor who asks a customer for an incremental fuel surcharge.

Make sure that when a company vehicle goes out, there was no other option. Find out how often you go to a customer's location in any given week and see if prior planning by both parties could eliminate at least one trip.

Look into creating delivery sectors, where you deliver to certain areas on certain days.

Just talk with your customers like a partner and ask them for ideas that would help you hold down fuel expenses. And don't be surprised when you find out that they're dealing with the same issues, and are talking to their customers, too.

Write this on a rock... Avoid gas pain with planning and communication with customers.