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Small Service Businesses And The Eighty Dollar Company Vehicle Fill-Up Dilemma

July 06, 2012 | Comments: 0 | Views: 194

Okay so, today I am retired, but I can remember when the gasoline prices were $.70 a gallon, and I thought that was a little too steep and somewhat angry that it was costing my little company so much each week. Later, after I started franchising my company, our franchisees began to complain when the price got up to $.90 per gallon. Just before I retired, the price of fuel was going through the roof, and had surpassed $1.35 per gallon. Our franchisees which were in the mobile car wash business noted that it was costing them $25 per day just in fuel alone, and that added expense hurt their bottom line.

My franchisees also wanted franchise royalty relief and asked me to lower the royalty payments each month, meaning it was going to hit me pretty hard too, at a time when we were growing fast and well, I needed the cash flow to meet the demand garnered from our fast growth rate.

Now then, you're probably laughing now, because I am certain you paid nearly 5 dollars per gallon sometime in the last couple years. That's insane, and it is a huge cost to our economy, and perhaps another reason why we need a better energy policy, and we need to get those costs under control if we expect job growth, and economic prosperity in this great nation.

Indeed, the other day I was at Starbucks, and one of the regulars who normally comes in runs an air-conditioning and plumbing business. He normally orders one of those Venti Frappachino with everything, but on that day, he came in and ordered a Grande size instead, without all the bells and whistles, and extra toppings. I laughed, and said; "I guess us Americans need to lose a little weight, huh?" assuming of course that he ordered a Grande size to cut down on the calorie count.

Well, he told me that he just filled-up his work van and it cost him $95, and because it was getting towards the end of the month, he was worried about being able to pay his house payment. Right then and there I had a mental flashback to all the conversations I had had with all of our franchisees over a decade ago as the price of fuel increased. Yes, there are costs in business, and that's part of the deal, and therefore you have to raise your prices to afford to stay in business.

But later that week, I talked to a mobile service operator, on the other side of the country, who told me that it was costing $80 to fill up his work vehicle, and he was filling it up over three times per week. He could not raise his prices anymore, or he'd lose business, therefore he had to eat those costs. This is much the same as when the commodity food prices went up, but the grocery stores and the food processing companies could not raise their prices, otherwise they would sell less food, people would just forgo their products.

You see, for small service businesses that $80 fill-up of the company vehicle is a huge dilemma, and it is severely hurting small business expansion as well as job growth. And really, when it comes right down to it there are not enough electric work vehicles available to offset this issue, nor can these small business owners afford to buy one anyway, because generally hybrids and electric vehicles cost a third to half again as much more on the sticker price. Indeed I hope you will please consider all this and think on it.

Lance Winslow has launched a new provocative series of eBooks in his Small Business Series. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank;

Source: EzineArticles
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