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How 5 Small Firms Handle High Gas Prices

Adelaine Construction; Harbor Springs, Mich.
Soaring gas prices have made Adelaine Construction, a residential homebuilder and home renovation company, rethink the jobs it agrees to and how workers get there.

Fuel prices hit the company's bottom line quickly, since trucks are used to deliver materials and workers to the sites.

"Our trucks are constantly moving. When fuel prices change it hits us in the pocketbook right away," Adelaine-Supernault says. "We can't go back to customers and say 'Oh, by the way, fuel went up. I'd like to charge you more.'"

Companies such as Adelaine Construction face the challenge of trying to be fuel efficient, but at the same time having to tow and carry large cargo and materials.

"As a builder, we have to have trucks," she says. "It's not like we can buy a Toyota (TM - Get Report) Prius."

But escalating gas prices makes it difficult to project overhead and expenses. Last year, the company spent about $15,000 in annual gas expenses. This year, if prices remain relatively unchanged, projected gas expenses could total $18,000, an increase of 20%.

Last year, the company got rid of their largest truck, which was used mainly for transporting materials, leaving three company vehicles. It has started to rely more heavily on local lumber yards to deliver the materials to work sites.

"It takes more coordination on our side. I have to plan ahead" to order materials, which in the end just makes the company operate more efficiently, she says.

Workers and management also carpool to work sites when possible, instead of taking two company vehicles. If a site is far away, management will take the car with better gas mileage, she says.

Another way the company is cutting is by limiting the radius for projects. Adelaine-Supernault says she likes to keep the projects within a one-hour drive of the office. That being said, as the company grows, workers must drive farther to get to projects.

"They're essentially making less money and our company is less profitable because it takes longer to get to work," she says.

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