Small Business Boomers

Plan for it NOW - Gasoline Prices To Rise

by jim on November 2nd, 2007

Expect the price at the pump to move up smartly over the next few months.  The stocks of the major refiners have just taken a hit.  Not that they’re sales aren’t up, but their cost are up more.

These are international companies like Exxon and BP.  They are some of the most widely held stocks in the world.  Mutual funds and pension funds hold lots.  (In the spirit of full disclosure, big oil stocks make up a significant part of my portfolio.)  There will be plenty of pressure to get profits up.  Their management will push both ways, costs and margins. 

What will $3.50 a gallon mean for business?  Exactly, I don’t know.  I’m sure it will depend on you business.  You better be thinking about the answer to that question.

If you have some numbers on your business run a few scenarios; sale off 10%, 5%, 1%, no change, up 2%.  See how how it looks.  Think about what you would do if any one of them came true.  That way you are prepared and will not panic as much.

In the Army they gave us a wallet card that had all the things you needed to know about a battle plan.  Where were the aid stations?  Where were the re-supply points for water, food and ammo?  Sort of a shopping list.  Their reason was that when the battle started it was going to be chaos.  Individually and as a leader you needed about the things that were changing in front of you.  You shouldn’t be thinking about the things that could be preplanned.  Same in business.

Amazingly, if you aren’t in panic mode, it doesn’t take long to run through the scenarios and determine what you can or should do for any one of them.  You’ll re-think things over time and eliminate mistakes you might make.  In panic mode you don’t have that luxury and will make more mistakes.

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