This story was originally published May 15, 2011. It has been updated to include the latest news on oil. NEW YORK ( MainStreet) -- After a brief interlude of gas prices falling to less mind-boggling heights (but still over $3 a gallon), prices across the U.S. are surging once again. This past weekend threat by Iran to cut off many of its biggest European customers has returned oil to the world's top economic concerns.
It can mean only one thing: rising prices at U.S. pumps once again, with some parts of the country surpassing $4 a gallon gas in the next few weeks and moving even higher this summer. The gas price pain hurt almost everyone. Cynthia Magnuson, spokeswoman for the National Federation of Independent Business, says energy costs are having a negative impact on members across the board. "Even those that might run businesses that try to minimize use of gasoline are really not immune to the rising prices," she says. "A bike shop owner needs his or her products delivered via a gas-guzzling vehicle." Rising fuel prices hit small businesses particularly hard because they tend to absorb increases rather than pass them on to customers as larger companies do, the NFIB says. That said, we found five small companies where sales are up as a result of high gas prices:
|As gas prices rise again, a few small businesses win by offering ways to ease the burden.|
Rising gas prices has caused more than a few employees to work from home at least part of the week to cut down on commuting expenses. That's where Junction Networks comes in. The Newton, Pa.-based company provides Voice over Internet Protocol platforms to small and medium-sized businesses. One of the more well-known names in the VoIP space is Vonage ( VG), which provides telephony services primarily to residential customers, but also to small businesses. "We've just seen a big increase in people looking to work from home," says Mike Oeth, CEO of Junction Networks. "Gas prices are definitely a part of it, prices in childcare and day care, after-school care -- those prices have gone up." Junction Networks' primary product is onSIP, a subscription-based service that can host a small business' entire communications platform. Employees can make outbound calls through their desk phone, home phone or mobile phone and the outgoing number will be the same business number. Incoming calls get routed to one number, but to a phone the owner selects. The system "brings all these sophisticated phone features and makes them available to small and medium-sized businesses, allows them to look larger and be just as effective if they're in one office or spread out all over the place," Oeth says. Implementing a VoIP communications system allows small businesses to be more flexible in whom they hire, Oeth says. As of May 2011, the company's revenue had doubled on both a year-to-date and month-over-month basis compared with last year, he notes. The company was expected to double the number of active phones by the end of 2011 to 20,000 from about 11,000 currently," Oeth said. "The only thing the small business needs is a phone and an Internet connection. It can sit on a desk, be an app on an iPhone or some software on their laptop," Oeth says. "There is no maintenance. There is no extra IT required. It also allows them to work from home just as easily and just as efficiently as if they were in the office."
Business is booming for motorcycle rental and touring company EagleRider, according to its president, Chris McIntyre. The company specializes in renting out Harley-Davidson ( HOG), Honda ( HMC) and BMW motorcycles, among others. EagleRider has gone from renting out just four bikes in the early 1990s to 4,000 bike offerings in 110 locations across the U.S. and 14 corporate locations in Europe. (The company also has international affiliates.) "What's happening in the rest of the world is happening in America. Gas is exploding in price," he says. "But our biggest growth and revenues are U.S.-based." "We have tons of people coming that not only rent our bikes, but then ask to buy them because it's a great economical way to commute.
Whereas EagleRider has seen strong growth with the spike in gas prices this year, River City Bicycles founder David Guettler saw it when gas prices spiked in 2008. Given the bike-friendly laws in Portland, many commuters have embraced the idea of alternative transportation -- but those who didn't were convinced to try. "The people of Portland figured it out during the 2008 spike and never slipped back," Guettler says. What is gaining ground is River City's outlet store, where Guettler attributes in increase in sales to consumers' lower disposable income -- with one factor being higher gas prices. The outlet is "doing very, very well," he says.
Swap.com was formed only last year, part of a growing industry offering used items to consumers looking to save money. Swap.com doesn't actually sell stuff; it provides a community where users can exchange books, CDs, video games and movies with other users for free. Users list the items they "have" and pick the items they "want." The company completes the swap-matching for them. The site also sponsors Swap Events and added a Swap4Schools section, in which teachers and librarians can exchange textbooks. In just one year, the site has grown to more than 1 million users, CEO Jeff Bennett says. "High gas prices are affecting consumers in a lot of ways," Bennett says. "Everybody has a budget. As they look at gas prices going up, it has an impact.
Brian Sanders, president of i9 Sports, says somewhere along the way youth sports became more about competition and winning rather than having fun. "Every study will say the No. 1 reason kids play sports is to have fun. Forty-two million American kids play sports, but half quit by the age of 12," either because they had a negative experience or it is no longer fun, Sanders says. The sports program caters to kids 3-14 and offers a variety of sports including flag football, basketball and cheerleading. Sanders says there are no tryouts or drafts. Kids are allowed to rotate through positions. The program is modeled so it is convenient and cost-efficient for households where there is likely to be dual-income earners, he notes. Practices and games are on the same day. "Moms and dads are time stretched, and so they are looking for programs where they don't have to take their kids to three to four practices a week and games every weekend," Sanders says. "It ties in particularly in light of the way gas prices are going up. We hear all the time that parents love the once-a-week commitment and don't have to drive all over going to games." The company started offering franchise deals in 2003; with 130 franchisees (who could have multiple sports programs within their given territory), the company has "exploded," Sanders says. "It's a tough time right now, and so for us to be able to provide an experience that's fun for kids, low-stress, convenient and affordable, it just really fits very well in today's economy," he says. -- Written by Laurie Kulikowski in New York. To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. To follow Laurie Kulikowski on Twitter, go to: http://twitter.com/#!/LKulikowski
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