Monday, August 01, 2005

Small Businesses take big hit from energy costs

Small businesses with narrow profit marguins can least afford the rising costs of energy:

In a nationwide telephone and e-mail poll conducted in July, 72 percent of respondents said their firms are affected by high gasoline prices.

In April, 64 percent said that was the case.

Yet, 51 percent of those hit by higher prices said they are not passing the increased costs on to customers.

That result is little changed from April.

"Fuel costs are an example of the kind of fluctuating expenses that small businesses must deal with every day," said Gregg Steinberg, president of International Profit Associates, a management consultant to small and midsized companies.

Steinberg said "the use of variable pricing strategies (such as pricing by the project or setting prices high but offering discounts on different items) – whether it is for fuel or other escalating costs – should be considered in order to control costs and ensure ongoing success."

The OC Register offers tips on how to save money on energy costs.