Energy is one of the most unpredictable variable costs incurred by businesses. While companies in some industries have more energy-related expenses than others and thus are more susceptible to price volatility, almost every business is in some way affected by fluctuating energy prices.
These include rising fuel costs, which can impact your business in many ways. It's most obvious every time you fill up your vehicle's gas tank, but rising fuel costs also impact business travel, utility bills, and more. Here are a few ways to deal with increasing fuel costs in your business:
- Maintain vehicles properly: This is the simplest and most effective way to save on fuel costs. Underinflated tires, clogged air filters, poorly tuned engines, and dirty oil all decrease your vehicle’s gas mileage and cost you money. Follow the maintenance recommendations in your vehicle’s owner’s manual carefully, and check your tire pressure weekly to keep tires properly inflated.
- Plan and consolidate trips: A little advance planning before you and your employees leave the office or warehouse can go a long way toward saving fuel costs. Map out all the places you need to go and deliveries you have to make and plan the most efficient route. If you have a fleet of delivery vehicles, stress to all your drivers the importance of planning their routes before they hit the road. And equip all your vehicles with GPS devices to help further streamline trips.
- Restrict deliveries and decrease your delivery area: Consider establishing a minimum order size for making deliveries as well as limiting the physical area to which you’ll deliver your products. You could also charge a small fee for making deliveries. First, however, weigh the cost savings against the value of the customer goodwill you might lose.
- Tack on a fuel surcharge: These became common when gasoline prices rose rapidly in 2008. But again consider how your customers will take the news. And be prepared to remove the surcharge when fuel prices inevitably fall. Many businesses back in 2008 never did, and their customers didn’t forget about it.
- Replace vehicles with more fuel-efficient ones: Depending on how much driving is required in your business, you might be able to justify the cost of trading in inefficient gas guzzlers for new, more fuel-efficient models. Hybrid vehicles have become extremely popular in recent years, while plug-in, propane, natural gas, and electric vehicles are other new technologies that may become increasingly common and affordable in the future.
- Meet virtually instead of face to face: Technology now enables businesses to conduct virtual meetings that are almost the same as actually being together physically. Whether it’s Skype, GoToMeeting.com, or simply a videoconference, virtual meetings are inexpensive (if not free) and can often suffice in place of physical meetings, saving in travel and fuel costs.
- Make your office and facilities more energy efficient: You can do a number of simple and inexpensive things to boost energy efficiency and save on utility bills at your office and facilities. Sealing up leaky doors and windows, ensuring adequate insulation, and monitoring and restricting thermostat control are a few. Also consider upgrading your windows, insulation, doors, roof, and heating and cooling equipment to new and more energy-efficient options. Your business may qualify for a 30 percent tax credit toward the purchase of a renewable energy system if it is installed before the end of 2016. These systems include solar water heating and electric systems, geothermal heat pumps, and small wind turbines.
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