Smaller US cos feel the heat of rising oil prices

[OhioChick]

Source: Reuters

27 May, 2008, 0000 hrs IST, REUTERS

FORT WORTH: Many US small business owners say soaring fuel costs are eating their profits at a time when the economy is already weak, making them more cautious about expanding or hiring.

“In theory we could pass on extra costs with fuel surcharges,” said Vince Puente, part owner of Southwest Office Systems (SOS), which sells and services copy machines and other office equipment to companies in the Dallas-Fort Worth area. “However, our competitors are all bigger than us and aren’t doing that, so surcharges would kill us.” “With gas rising 5 to 10 cents a week, you have to find ways to cut costs,” he added.

SOS has 70 employees and 2007 revenue of $16 million. But Puente said his freight costs have gone up as the companies hauling his office machines apply fuel surcharges. SOS has also just had to raise the amount of gasoline it pays employees for driving to visit clients to 42 cents from 36 cents per mile, at a cost $3,000 a month.
“That money comes straight out of my pocket,” Puente said, adding that he has now also put his assistant in charge of administering equipment leasing, a revenue-generating job.


Read more: http://economictimes.indiatimes.com/International_Business/US_cos_feel_the_heat_of_oil_prices/articleshow/3074604.cms

[bdamomma]

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