Open Association of Landscape Industries
Dealing with rising fuel costs - the silent business killer
Whilst we continue to focus on and monitor the affect the hosepipe ban is having on the landscape and garden industry, one can't help thinking that we've taken our eyes of the rising cost of fuel.
Diesel and petrol is at record highs and there appears to be nothing on the horizon to thwart or reverse the rise. Supply and delivery worries have conspired to continue to drive prices up.
A business running a single van doing 14,000 miles per year (assuming some personal use) is now £1,189.00 worse off than it was in the same period in 2009.
Let's say a one person business doing approximately 2,000 hours a year at £14.00 per hour. That business is now shelling out an extra 4% of its income Since January 2009 just to get to and from its work. The business is spending 10% of its income (£1.46 per hour) just to put fuel in the tank.
Incomes have stagnated
One might argue that to combat the rise in fuel and to continue to make a profit, all one had to do is put up their hourly rate. Well in an ideal world that's a very simple solution but over three years of recession has actually put prices under pressure and the marketplace has become very competitive.
All business owners can do is think about ways of cutting costs. Staying local by targeting work within a short distance of ones base is one obvious way to reduce travel costs.
Reducing fuel consumption can also help. Not overloading a vehicle - i.e only carry the bare minimum - cuts down on fuel consumed, as also regular servicing, correct tyre pressures and maintaining a steady speed too.
Of course if you are yet to purchase a vehicle or you are about to trade in an old one then look to get the smallest most economical vehicle you can.
Let's face it, with the government needing to slash the country's costs and raise revenue to pay off the debts from years of success excess, there's little chance that fuel tax will decrease.
What would you do to reduce fuel costs for your business?
More reading: The hidden cost of fuel
Data taken from Whatgas.com
Replies to This Discussion
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PRO MemberPermalink Reply by Phil Voice on -
It's still a cost Paul.
Paul @ PPCH Services said:Fuel is tax alowable, so with a decent cash flow the price is not a big problem (for me anyway)
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PRO MemberPermalink Reply by Brian www.mibservices.co.uk on -
Hi Gary, the trailer I use for the Ransomes is a 12 x 6 double axle and must weigh in at around 250kg, that coupled with my Ransomes at 680kg, plus all the other tools and machines in the back of the van puts serious amounts of fuel through the engine :-((. I'm hoping by losing the 250kg on the trailer and the newer van, then I might see a difference in MPG consumed. It might not make a lot of difference in the long run but like you said, I too "feel" better about it, and absolutely hate faffing around with trailers everyday, so looking forward to just driving the Ransomes and John Deere's straight up and into the VW. :-))
Gary RK said:Brian, we've done the same and stopped using our trailers. We've also taken the roof racks off two vans that get used a lot on motorway miles. Not sure exactly how much it improves, but I 'feel' better for doing it !
Also considering speed limiters ;-)
The shock I recieved a short while ago when having to fill up one of vans from 'empty' was seeing a receipt that read £130 !!!
That, gents really did bring it home !
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PRO MemberPermalink Reply by Brian www.mibservices.co.uk on -
Exactly, and any, if any savings are made then it can be invested in new tools each year so definately worth thinking about for the coming 4 years.
As Paul says also though, it is all tax deductable, but the VAT we all pay on fuel is not, unless your a VAT registered company !!!
Phil Voice said:It's still a cost Paul.
Paul @ PPCH Services said:Fuel is tax alowable, so with a decent cash flow the price is not a big problem (for me anyway)
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Permalink Reply by Thermo on
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im vat registered, so it takes little of the squeeze out, but with two vans on the road it is not cheap. We delibretly decided to do more local work 18 months ago. It means i only advertise locally, so in the main that is cheaper. It also means as i do moree local work reguarly i get seen more locally and that encourages other business. i also find im spending less time and fuel on going to do quotes further away. In turn that means that local jobs mean less travelling to our yard or suppliers for bits and pieces. Also means more time on site, with less travelling time, so more jobs can be fitted in. So far weve actually cut our fuel bill compared to last year, even with the rising costs.
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Permalink Reply by John on -
Perhaps we all need to have a chat with the gardener on LJN who
uses a bicycle with a small trailor attached. If I could I would do just
to prevent the government from grabbing more of my money via the
fuel VAT rip off.
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PRO MemberPermalink Reply by Brian www.mibservices.co.uk on -
Yeah with another 16p per gallon going on in August !!!!
John www.acegardenservices.co.uk said:Perhaps we all need to have a chat with the gardener on LJN who
uses a bicycle with a small trailor attached. If I could I would do just
to prevent the government from grabbing more of my money via the
fuel VAT rip off.
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Permalink Reply by David Benson on -
the other day i was trying to work out the fuel cost per hour for the machinery and van and got it to nearly £2 i thought it cannot be right as it was getting late i gave up and went to bed
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Permalink Reply by Richard Boyd on -
Good article Phil "More reading: The hidden cost of fuel"
Re.
"Because we tend to see prices in litre at the pumps I have converted the yearly consumption from gallons to litres: (18,000m/28mpg x 4.5litres) = 2893.5 litres."
Can this be changed to (18,000m/28mpg x 4.545litres) the greater the mileage the more impact this figure has.
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Permalink Reply by Richard Boyd on
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As a company that does in excess of 50K a year you really notice in when you are putting in £200 per day in to vehicles "think cash flow" just to fuel up...!!! Especially when some clients ask for 90 days credit...
Fuel tax is nearly 60%, why? Because the state is like a junkie, it's habit is out of control, it will not go for rehab but just steals from the individual - because it can.
When we actually get a good ROI for that taxation I will turn around and congratulate the government of the day (don't care which party), until then all I can say is that they are a useless, lazy, incompetent bunch of thieving morons.
Anyone can run a crap business, anyone can run a subsidized business but it takes special people to do something well and we do not have special people in government (local, central or civil service), all we have are a bunch of also rands, demanding money because they can!
I put a challenge out to these idiots, come and run my business for a month and if you even manage a half way decent job you can have the business, I could do yours without even thinking about it and I would do a good job...you need to have passion, commitment and vision not just be content to sit back and await your gold plated pension schemes.
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PRO MemberPermalink Reply by Steve Sonic Grounds Maintenance on -
Garyhave you worked out the price differences between using your trailer and not using your trailer? In mpg and cost? I'd be interested to know.
Gary RK said:Brian, we've done the same and stopped using our trailers. We've also taken the roof racks off two vans that get used a lot on motorway miles. Not sure exactly how much it improves, but I 'feel' better for doing it !
Also considering speed limiters ;-)
The shock I recieved a short while ago when having to fill up one of vans from 'empty' was seeing a receipt that read £130 !!!
That, gents really did bring it home !
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PRO MemberPermalink Reply by Phil Voice on -
Nick Clegg has no idea what it is costing you to fill up your vehicles
http://www.thesun.co.uk/sol/homepage/news/politics/4830934/Lib-Dem-...
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PRO MemberPermalink Reply by David Cox on -
1998 Berlingo gets me 40-45mpg depending on loading. Add a trailer and I get 30-40mpg depending on loading - but accelerate like a slug in the sun.
A plumber friend near me drives a 2009 berlingo and claims never to get more than 30mpg... THeir surely can not be that much difference between them?
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