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Discussion Starter #1
I'm going to have to make some changes due to fuel price increases. I've been absorbing the increases since it went over $1.0/gal. Now it is affecting the bottom line significantly. I'm just curious as to how the rest of you are handeling it.
Some here are adding a mileage charge (difficult to calculate), others are simply raising rates in general. I'm considering a bullseye approach. If you are within 5 mi radius =X, 7 mi.=X.
 

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Painting Contractor
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That's adding more fuel to the fire of the other debate.
Is the cost of the sales call more expensive now?
What if you need to make three sales calls per job (33%)?
What if you make six sales calls per job? ( two visit sales call).
These are very significant numbers to ignore.
E-mail is great!
 

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Discussion Starter #3
George, I now have 11 full sized trucks on the road. Some sit most of the day and a few move all of the day. Fuel is becoming a consideration as it cuts into profit margins.
I was asking as to how others were dealing with it.
I bungled through when Carter was pres. and I'll make it again. Just wondering if anyone has thought of someting creative that gives a different slant to customers. Most of them buy gas too.
 

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I ll have to think about that Teetor,
It will become worse it seems before it gets any better.
It likely won't become any better soon.
Eleven trucks is a problem.
Eventually a service charge, or an increase in your rates reflecting
higher overhead will be imperative.
 

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I think that any solution you come up with is really going to be long term and not short term, I will be suprised if we ever get back to a steady lower price, I regretfully see in the long run some lowering of gas prices, but followed by cycles of higher and higher record breaking bumps even more than todays prices.

That being the case without even considering all the other issues surrounding getting customers to accept what amounts to a trip charge albiet at least a trip charge based in something most customers can identify with... I would say that like any other expense you have it has to eventually become permanent and just go into the bottom line and go into how you figure your rates to determine your profit.

Even with 11 trucks, based upon what you have posted describing your customer base and the years of back logged/scheduled work you have waiting for you, I don't see what amounts to really such a small percentage of an increase really amounting to much of a problem for someone in your position. Customers in your posted income level and customers who are referrals are much less sensitive to prices.

For a small guy just getting by with a thin bankroll in the bank where a week of idle time would make the difference between profit and loss beause of his fixed expenses, I can see this being much more of a problem.
 

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Flooring Guru
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I am thinking of how I am going to spend the bigger PFD checks :)


actually the fuel prices are insane!
 

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Gas is insaaane? I went to fill up the van and the pump shut off at 75.00..ended up being 85.00 after i shut off and filled again. My father is in the fuel business and he always knows the gas estimations before everone and at the beginning of last winter he told me that all the gas was going to hit 3 dollars by the end of the summer and now by next summer maybe sooner it would be 5.00 just some heads up i guess by the way im in chicago.........i guess i dont feel so bad for selling my mustang gt for a chevy colorado now :Thumbs: hey teetor maybe have your employees fill out a mileage chart at the beginning of a job and add it in as an end of the job extra or something not sure about that though....
 

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Depending on scope of work, just add another $1-200 to the total bid to cover fuel expenses. Naturally additional cost will have to be based per job since some require more back and forth than others, but it will all come out in the wash.

Sad part is, I think this will ultimately have a bad effect on us smaller guys since most homeowners are now going to put the deck, bath remodel, etc...things they'd "like" to have done back to the bottom of the list for awhile until something levels out. To the average 9-5 working homie that commutes 15 miuntes one way this gas price really is'nt going to break the bank, maybe an extra what, $15 dollars a week in fuel cost, but the mental picture homies paint in their own head with all the negative publicity starts to influence their descions weather it's a big influencing fator or not....gas is $3 gallon, we cant buy anything for awhile....meanwhile they're only $15 poorer at weeks end.

Personally been drag racing for 4 years, '06 will be a great time to take the year off. Between my trucks and race gas I average $2-300/week now, and I'm just a small guy :eek:
 

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...jammin
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I did raise my rates for the small dinky 1 or 2 hour jobs mainly because of the cost to get there
So far no-one has questioned it
(It's not separated on the bill)
I guess that means I wasn't charging nearly enough in the first place

For larger contract jobs I have folded the cost into the final price
But after last month I don't think I added enough, I think I will have to re think this one
I like the bullseye and have used that before
The downsides are people will argue and lie about where they are on the target, and loosing business because "the other guy won't charge extra to come out here"
It's usually pretty easy to define how far you'll go for a certain job w/no prob
But then if it's a bigger job-you'll go farther....now the target is flexible...

bergenbldr said:
Whats the highest pice per gallon anyone here has seen ,some stations here are past the 3 dollar mark.
It was over 3 at the casino last time I was up there
$3.08 & 99/100 I believe
 

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Discussion Starter #12
Mike, My projected fuel bill is over $30K, last year it was just over $15K. You have to remember all of the service that is also attached to oil such as oil changes and tires.

Another problem is that the coast is getting pretty well saturated and construction is moving further away. Simultaneously there is an increase in traffic and signals slowing down transportation that results in more city driving (increased fuel usage) and guys spending more time sitting in traffic and less time working.

I have absorbed the costs to date but as everything escalates I am going to have to develop a comprehensive plan to deal with it. Rising fuel prices will make it easier to implement in the customers eyes even if it is done in phases.
 

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Teetor- I'm sure you realize also that we haven't even seen the real damage yet - if fuel prices stay here permanently at this level there will be inflationary jumps in everything that goes into a customers project and what you are going to be charging them.

We are going to see every nail and piece of lumber go up in price because of the associated increase in costs to truck and produce them.

I think permanent increases in your expenses cannot be absorbed and you have to end up raising your prices. But temporary increases in your expenses can be handled a bit differently.

Do you think you will ever see your fuel costs go back to what they were?
 

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No, fuel prices won't be going down any time soon. Up is the way of the future. Meanwhile, somebody is making $BILLIONS$ off the oil being STOLEN from Iraq, and it's not even being metered. Hell, nobody even knows WHERE it's going!!! Halliburton has the contract for those pipelines and they're an American company. How is it we latch on to more oil and fuel prices rise???? :eek:
 

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Discussion Starter #15
I agree with AA.

Much of this we have brought on ourselves, we are the ultimate consumers on the planet, bigger is better. I could spend months driving you around to see development after development of 4,000 - 10,000 sq. ft. homes with 20+ ft. ceilings and all of the glass that you can put in it. In the driveway, an Expedition for her to get her nails done and a Hummer for him to drive to the office or golf course. We tear through energy of all types. Give us a nickle and we'll spend a dime. I see a rough road coming just in time for my retirement.
 

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Say it isn't so Kaspar, "$5 a gallon". Currently at Panama City I've paided as low as $2.53 a gallon and have seen some gas stations sell at $2.73. These prices are for regular gas 87.
 

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The prices wouldn't be that big of a deal if the cost of fuel didn't affect everything in the US market. I have to raise my prices. For the general contractor, it could mean the difference between using real hardwood flooring or going to laminate or just carpet. This shuts my business down because currently I only sell, install, sand and finish only real hardwood.
 

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explain to them that EVERYTHING they pay for is higher . if it has to be shipped from somewhere the fuel costs are passed on to the consumer. you just don't see it on an itemized bill. every service industry that comes to your home has or will increase their prices due to fuel costs. will they blink an eye when ol' ma bell tacks an extra $20 to come out look at a box , look at you funny, and say UH-DUH- i don't know what's wrong(in that order)?
 
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