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How Will Gas Prices Affect Whether You Stay In Business Or Not

 
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Old 10-19-2013, 07:10 PM   #1
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How Will Gas Prices Affect Whether You Stay In Business Or Not


All,

I know gas prices have gone down nationally. However if gas prices were to start to creep up again. At what price point would it take to seriously affect whether you stay in business or not...Just curious
with the carbon tax being considered down the road
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Old 10-19-2013, 07:17 PM   #2
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


just add it to your overhead and keep on truckin.
I mean, what else can you do.

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Old 10-19-2013, 07:26 PM   #3
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


They will affect everyone, so that will just raise the market slightly. We drive 500 miles routinely to do jobs with multiple trucks and trailers and fuel is still less then 1% of our cost.
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Old 10-20-2013, 12:04 PM   #4
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


in 2007(?), I had a serious guzzler, gas hit $4 per gallon, and they announced that $5 was coming, this was just after taking a loss on a job, so I jumped ship and went to work for a competitor. Within 4 months gas was back to $3.40 a gallon.

I still regret over-reacting to the timing and the hype. As others have said, it is a cost of doing business and needs to be factored into the price.

I now factor my costs based on $4 per gallon, If I tracked it, I could be banking the difference while the price stays below. Regardless, when prices exceed $4.25, I will change my overhead formula to reflect that.

You should never shut your lights off due to a price increase that your competition also will need to consider in his pricing.
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Old 10-20-2013, 12:09 PM   #5
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


Quote:
Originally Posted by BattleRidge View Post
They will affect everyone, so that will just raise the market slightly. We drive 500 miles routinely to do jobs with multiple trucks and trailers and fuel is still less then 1% of our cost.

1%? Really?

I drive 45k a year, and I can assure you that while I run a profitable business, my fuel costs are more then 1%.

So how do you get to that number?
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Old 10-20-2013, 12:20 PM   #6
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


Its not going to affect the way I do business at all. If it means I need to add 100 bucks a week in overhead I will.
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Old 10-20-2013, 01:24 PM   #7
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


Yup. just pretend it's $5/gal and you'll be fine. I don't breakdown to that much detail though. I used to, but now I just figure $20 round trip * anticipated trips + 2. Much easier.
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Old 10-20-2013, 01:36 PM   #8
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


As much as I hate seeing higher fuel prices. Istill have to work every day to keep the bills paid. At my age I can not see going to work for someone else. So just have to add it to the expenses and keep on going.
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Old 10-20-2013, 02:48 PM   #9
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


At least $20 before I'd jump.
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Old 10-20-2013, 03:35 PM   #10
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


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1%? Really?

I drive 45k a year, and I can assure you that while I run a profitable business, my fuel costs are more then 1%.

So how do you get to that number?

We will do about 3 mil this year, and spend about 25 - 30k on fuel. We just completed a bridge for 274k and fuel including mob is about 1400. Not to mention I do projects in town like a big standing seam roof for 100k and I will spend like 300 bucks in fuel dedicated to that project. Probably 50 for the boom lift
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Old 10-20-2013, 03:36 PM   #11
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


Probably about 50 for the boom lift for a few days of overhead work and a I will fill my truck and company truck once, for back and forth.
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Old 10-20-2013, 05:47 PM   #12
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


It all depends on the type of work you are doing. I know on our contracts, we have a fuel surcharge if fuel goes over x amount of dollars within a certain time frame of signed contract. This is done due to the fact that most of our contracts are awarded, but start date is delayed due to one reason or another. Fuel surcharge is based on national average fuel price on any given monday
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Old 10-20-2013, 06:55 PM   #13
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


I bought another big block truck. That is how I deal with the price of gas.
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Old 10-20-2013, 07:04 PM   #14
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


If fuel prices going up, is enough to take you over the edge, your problems are much more then fuel prices.
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Old 10-21-2013, 06:26 AM   #15
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


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Originally Posted by I Mester View Post
just add it to your overhead and keep on truckin.
I mean, what else can you do.
Exactly. What do you do when the cost of materials also go up? Increase your prices.
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Old 10-21-2013, 06:51 AM   #16
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


I have been sort of looking at a new truck, and if I squeeze the trigger, I will go for CNG. One of my good friends is an accountant, and when we were talking about it, he ran the numbers in a few ways I had not considered, and presto! It would cut my vehicle expenses in half, or more, given 5 years of operation, plus cut my fuel expense by over half, and I would still take the full deductions.

Something to think about.....with DOT busting our balls so hard lately, diesel one tons will be a truck of my past, not future.
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Old 10-21-2013, 06:55 AM   #17
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


Quote:
Originally Posted by BattleRidge View Post
We will do about 3 mil this year, and spend about 25 - 30k on fuel. We just completed a bridge for 274k and fuel including mob is about 1400. Not to mention I do projects in town like a big standing seam roof for 100k and I will spend like 300 bucks in fuel dedicated to that project. Probably 50 for the boom lift
While the actual fuel cost may be 1%, if you actually do the expense of vehicle operations, you might be surprised just how expensive the vehicle is.

My work truck is the greatest expense I have, and I have 2 telehandlers, 3 scissor lifts, CTL's, excavators, and a semi tractor / trailer to haul them on. I would guess close to 10% of my expenses are directly related to my work truck. It would depress me to really know how much.
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Old 10-21-2013, 06:57 AM   #18
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


Quote:
Originally Posted by Joasis View Post
I have been sort of looking at a new truck, and if I squeeze the trigger, I will go for CNG. One of my good friends is an accountant, and when we were talking about it, he ran the numbers in a few ways I had not considered, and presto! It would cut my vehicle expenses in half, or more, given 5 years of operation, plus cut my fuel expense by over half, and I would still take the full deductions.

Something to think about.....with DOT busting our balls so hard lately, diesel one tons will be a truck of my past, not future.
CNG is a little inconvenient, do you still have to hook them up at your house and let the compressor run all night to drive a couple hundred miles the next day?
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Old 10-21-2013, 07:57 AM   #19
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


Quote:
Originally Posted by Joasis View Post
While the actual fuel cost may be 1%, if you actually do the expense of vehicle operations, you might be surprised just how expensive the vehicle is.

My work truck is the greatest expense I have, and I have 2 telehandlers, 3 scissor lifts, CTL's, excavators, and a semi tractor / trailer to haul them on. I would guess close to 10% of my expenses are directly related to my work truck. It would depress me to really know how much.
I don't know if whoever you bank with does this, but with my online banking you can filter your expenses based on headings like food/entertainment/gas.
Recently I noticed that the online banking also stores your records for as long as you've been banking with them.
I decided to check out my fuel costs for the past 5 years.
Never do that.
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Old 10-21-2013, 05:45 PM   #20
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Re: How Will Gas Prices Affect Whether You Stay In Business Or Not


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CNG is a little inconvenient, do you still have to hook them up at your house and let the compressor run all night to drive a couple hundred miles the next day?
No, CNG is not the dark ages, we have filling stations and all for them, and the range is the same as for gas, plus you still have gas back up. One of the coming industries will be the CNG boom if, and only if oil actually hits $140 or $200 a barrel and gasoline hits $6....then hang on.

Conversion kits are getting cheaper, tanks larger and better, and systems more user friendly. I would not be surprised if fully half of all vehicles in 30 years were CNG.

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