March 22, 2022

Are You Accounting for All Your Costs

By Paul Daniels

I wanted to comment on Paul Bieber’s blog from last week, as gas prices are the primary conversation here in California. Every time I go to fill up, the price is different. You can save money at some discount stations like Costco or Sam’s Club, but be ready to wait in a line that reminds me of those from the 1970s. Some of you may have read about these.

As Paul Bieber mentioned, the important thing to realize is that this is an expense that you must account for in your business. With gas over $6 a gallon here in California, you need to pay attention. And if you have a crew waiting 30 minutes or more to fill up at a Costco, this will add up fast.

This is the type of expense that comes right off your bottom line,just like the price inflation is affecting most things you are purchasing to keep your business running, from razor blades and paper towels to aluminum extrusions or shower hardware. If you don’t pay attention to these costs, you may be surprised at the end of the year. If inflation stays at just 5-7% this year and your business grosses $500,000, that will take $25,000 to $35,000 right off the profits for the year.

The other side of your business this affects are your employees. I keep reading articles about how many people are quitting their jobs or reassessing their career choices in this market. You want to pay attention to how gas prices are affecting your people. It might be easier for them to collect a gas surcharge from a customer if some of this was passed on to them. There are many programs you can use to help your employees get through this, as well. Carpooling programs offer a weekly lottery for all passsengers that could earn them a dinner or shopping card—setting up a program to offer a gas allowance for jobs beyond certain distances from the company. You could also incorporate this into a gas surcharge setting up different charges based on mileage, which you could then share with your staff. This will show them that you are concerned with how this inflation also affects their bottom line.