Did you know that between 2012 and 2015 gas prices in the United States fluctuated from less than $2.00 to more than $5.00 per gallon? Did you know that rising and falling gas prices directly affect small businesses and the overall economy?
The simplest way to understand the correlation between energy costs and the economy is to consider shipping costs. When gas prices go up, it costs more for businesses to move goods—both pre- and post-manufacturing. When their shipping costs go up, prices charged to consumers go up, too. It’s unavoidable.
The Effects of Gas Prices on Small Businesses
According to data in the infographic from National Funding shown below, nearly three out of four small businesses (72%) are affected when energy costs go up. Of course, prices rise when gas prices rise, which means consumers feel the effects, but research has found a direct impact on workers, too. The infographic shows that more than two in five small businesses (41%) change their hiring plans due to changes in energy costs, and more than one in five small businesses (22%) reduce employee hours because of the high costs of energy.
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Considering that small businesses account for 99.7% of employer firms in the United States and 43% of all high tech employment in the country, these statistics should raise concerns. Furthermore, small businesses account for 46% of private sector output and 89% of companies exporting goods from the United States. When energy costs go up, a significant part of the U.S. economy is negatively impacted.
Combating Rising Gas Prices
To combat rising gas prices, many small businesses have increased telecommuting among employees, and more 100% virtual companies (with no physical locations at all) are starting every day. Companies like Automattic (the company behind WordPress), Buffer, Mozilla (the company behind Firefox), Zapier, and Basecamp are 100% virtual and very successful, and all of their employees work remotely. And while most large companies have yet to embrace telecommuting, some—like Aetna, Xerox, and Dell—are more open to it.
The cost savings of telecommuting in the United States would equate to over $1 trillion per year. During Telework Week 2014, the 121,000 people who pledged to participate saved $12.3 million in commuting costs and gained 665,936 hours back into their days. The average worker would save an average of $90 per week simply by not commuting. That translates into $4,500 a year per average worker in commuting savings. What would you do with that money—not to mention the time and stress savings?
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The infographic below shows more statistics about how fluctuating gas prices affect small businesses. Take a look and think about how your business and your wallet are affected.
This infographic was brought to you by National Funding
Susan Gunelius
Susan Gunelius is the Founder and Editor-in-Chief of Women on Business. She is a 30-year veteran of the marketing field and has authored a dozen books about marketing, branding, and social media, including the highly popular Ultimate Guide to Email Marketing, 30-Minute Social Media Marketing, Content Marketing for Dummies, Blogging All-in-One for Dummies and Kick-ass Copywriting in 10 Easy Steps. Susan’s marketing-related content can be found on Entrepreneur.com, Forbes.com, MSNBC.com, BusinessWeek.com, and more. Susan is President & CEO of KeySplash Creative, Inc., a marketing communications company. She has worked in corporate marketing roles and through client relationships with AT&T, HSBC, Citibank, Intuit, The New York Times, Cox Communications, and many more large and small companies around the world. Susan also speaks about marketing, branding and social media at events around the world and is frequently interviewed by television, online, radio, and print media organizations about these topics. She holds an MBA in Management and Strategy and a Bachelor of Science degree in Marketing and is a Certified Professional Career Coach (CPCC).
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