Gas Crisis Is Good News for Fuel-Efficient Businesses

Gas prices this high for this long? It’s downright uncomfortable. In fact, it’s enough to get consumers to change their behavior. Rising prices have many consumers turning to alternatives– from car-sharing services to scooters–and entrepreneurs are reaping the rewards.Take Scott Griffith, CEO of Zipcar Inc. based in Cambridge, Massachusetts. The $15 million car-sharing service lets its members reserve a car online by the hour or by the day, walk to the nearest pickup location and drive away–gas and insurance included. Currently, Zipcar operates in 29 cities and gets an average of 2,500 new members per month. Original article here:

OK, maybe I was tempted to post this because my carefully hoarded last tank of gas is getting low and my souse wants us to go shopping this afternoon. We work from home so I don’t have to fill up very often unless the business requires a trip. Or maybe I thought it was worthy of comment because I am always amazed at how well the more traditional rental car companies do when they make the process of using one of their cars so damn difficult.

Whatever the reason, today’s a good time to decide if you are going to run your business on the “glass half full” or the “glass half empty” philosophy. It is very unlikely that the price of gas or diesel is going to drop any significant amount any time soon. President Bush’s plans to rape the Strategic Reserve and to cut enough brush to make a mesquite-powered car notwithstanding. So there are two things you can do when the month’s fuel bill comes in. Make some kind of positive use out of the inevitable high costs or just pay, sulk, and suffer with smaller cash flow.

How can you “profit” from high fuel costs? Well here’s a thought or two”

1. Take a page from Scott Griffith’s book and find a service that the rest of the world, just as sick as you are of those gas bills, will adopt in order to save at the pump.

2. Get a drop on tour competition by using GPS tracking and GPS routing services to save significant amounts on the same (or better, through smarter dispatching) service … once you take customers away from a competitor it will cost him five or ten times as much to win them back … high gas prices or no high gas prices.

3. Shift more of your business into the on line environment.

Let’s just consider number 2 for today. Suppose you run Sam’s Lawn Service and you have 10 trucks on the road. Last year you were paying about $200 a month per truck for fuel. This year it looks like each vehicle will be costing you $300 or more. A $3000 a month ‘hit’ on your cash flow …tough for any small business.

Buy (lease, for about a dollar a day) a GPS tracking system for each truck. Smartly used you can easily save $15% on your fuel ($45 a truck, you’re making money off the GPS already) and a hundred or two hundred more a month on labor savings and the ability to serve more customers per truck/service tech per month.

You might even make back the $300 “gas pain” completely, but realistically, if you net $200 per truck in savings and Maggie’s Lawn Service, your chief competitor, doesn’t ‘attack’ the gas costs with GPS tracking technology, you’re still going to beat the pants off Maggie’.

The true cost of anything is the foregone alternative. You can’t manage what you can’t measure.