How’s that inflation working out for you? Here, I want to revisit a column from March 28, 2022.
Let me check in with you, first. In March I suggested you look for ways to cut around the margins, maybe reach out to elected officials to say your piece, and give your pricing a look. Cuts here and there don’t make up the difference but can help, particularly with vendors you do plenty of business with. Leaving another voicemail on your state representative’s office line may feel good but not amount to much. But, what about prices?
Look, the year ends before you know it. Revisit what you charge for your services. Bump things up. Make sure what you do pays you, your crews and anyone back at the office making all those accounts miracles happen. We preach it here often: Don’t worry about what your competitor charges. Charge what you need, then let your competitor worry about how to make it work on the cheap.
Back to inflation. March’s column focused on what you pay at the pump. This update has both good and bad news. First up, the bad: diesel at the pump has gone up 3.7% since March according to U.S. Energy Information Administration (EIA) numbers. The per-gallon cost average for the country climbed to $5.03 from $4.85. While diesel got a bit pricier since I wrote the last column, it hit a peak just as summer started ($5.81 on June 20) and has mostly trended down since. As consumers, we can always hope for a faster trend down, but the data show what they show.
Regular unleaded tells a rosier story. Since March, pump prices have fallen 10%, to $3.69 from $4.10. Like diesel, gas prices spiked in June ($5.01 on June 13). Unlike diesel, gas has taken a steeper slide down through the summer.
We all long for the days of under-$3 gas and diesel that, depending on your area, were just 18 months ago in spring 2021. But both business owners and consumers have to work with the economy they have. You’re grateful you can fill up your F-150 for under $100, but then wince to pay $10 for a sandwich that was $7 not that long ago. The mixed messages surround us. What’s a contractor to do? Keep pulling the cut-costs and raise-prices levers. Watch the pressure on yourself and your business. Keep a good gauge on your employees and equipment. Stay steady and this too shall pass.
What do you think? Has an ease-up in inflation given your business a little breathing room? Is it still too early to tell? Send an email to email@example.com.
Stay safe out there, drillers.
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