By Thad Plumely
Water well business owners entered 2022 feeling mixed emotions.
There was stress. Supply chain woes make some jobs as difficult as completing a puzzle without having the picture on the box. And finding a competent hire ready to dive into a new profession? About as likely as finding a winning lottery ticket on the sidewalk.
The job list was long, though, and the busyness made the headaches feel worth it.
Until they suddenly didn’t. Russia invaded Ukraine on February 24, and owners of water well drilling businesses—and all small businesses around the country—felt like they were under attack too.
The price of a key line item for every water well business owner—fuel—shot up to record levels. The cost of other key parts increased too, and those waits on parts became even more of a guessing game.
Inflation exploded with a deafening boom. Shelves at stores looked like they do after a natural disaster and long lines at gas stations brought back memories for those old enough to have waited in them during the early 1980s.
If that wasn’t enough, cybersecurity became a critical issue with the government warning business owners to beef up their online defenses as Russia may try to impact the computer systems of American companies. For more details on this, click here to read the People at Work column.
It can all add up and make it hard to want to turn on the lights in the office some mornings.
The effects of inflation can eat up the profitability at a small business. That’s why you need to be more proactive then ever right now.
Pay close attention to your expenses. Track them and think about what can be cut right now because it’s not providing a ROI. And then raise your prices.
Yes, raise your prices. Fuel, parts, the paper in the copier; they all cost more right now, so you must pass those increases on too.
Look around and see if you can streamline any of your processes in the office. Can anything be automated like billing, collecting payments, or order taking? I read about a company that reorganized shelves in a warehouse to the point productivity increased. That business is on top of things.
Stock up on supplies when you have an opportunity to do so. I know that is easier said than done but getting core materials and parts while you can at whatever rate you can is a must in times like these.
Finally, run potential numbers and plan accordingly. Call them “what-if scenarios,” but see what it takes to remain profitable if costs continue to increase or the wait on parts takes so long jobs require more trips to the jobsite, burning that expensive fuel.
The world changed this year, and we need to continue to evolve in it. We certainly don’t know what emotion to feel right now, but that can’t stop us from turning on the lights.
Thad Plumley is the editor of WWJ and director of information products at the National Ground Water Association. He can be reached at firstname.lastname@example.org, or (800) 551-7379, ext. 1594.