The Price of Gas
Position yourself for growth in 2017—join us live at the Entrepreneur 360™ Conference in Long Beach, Calif. on Nov. 16. Secure Your Seat »
What do higher gas prices mean? From a macro view, it means the end of the Industrial Age and the beginning of the Information Age. So businesses that operate in an Industrial Age context, such as airlines and auto manufacturers, are hurting.
Higher gas prices also mean the rich are getting richer and the poor are getting poorer. A dollar means a lot more to a person making $50,000 a year than a person making $500,000. So when a gallon of gas goes from $3 to $4, the dollar increase hits lower income people harder. A dollar increase means people who once drove their car to work now ride the bus or train. For these people, a $1 increase in the price of gas can mean a decrease in their standard of living.
For entrepreneurs, higher gas prices mean you have to become a better entrepreneur. For example, if your company produced one pizza per hour in 2007, you'd better be producing 10 pizzas per hour by 2009. And not only do you have to produce 10 pizzas per hour, but you also have to sell 10 pizzas per hour. Simply buying a faster pizza-making machine or hiring more pizza makers won't cut it.
This means you need to become a better leader of people. If you have workers who rate a five on a scale of one to 10, you must inspire them to become sevens or eights. This may require further training, demotion or termination.
In the Industrial Age, workers came to expect higher pay for seniority, loyalty and longevity--regardless of productivity. And older workers were valued. In the Information Age, if older workers' speed and skills don't keep up with the accelerating pace of our times, seniority, loyalty and longevity may become liabilities. Steady performance may be a liability if increased performance is required. There is a difference between employees working for a one-pizza-an-hour organization and an organization operating at a 10-pizzas-per-hour pace.
If you, as the small-business owner, have Industrial Age values, then you're the liability. If you have Industrial Age ideas, you put your workers at risk. Higher gas prices mean you and your organization must do much more for much less. You must become a bolder leader, not a better follower.
In my organization, higher gas prices have caused us to use videoconferencing more and airline travel less. Higher gas prices have pushed us to expand through franchise owners instead of more employees. Higher gas prices have moved us to collaborate more and compete less. In other words, higher gas prices have helped make my company richer, because higher gas prices forced me to become a better entrepreneur. What do higher gas prices do for you?
Robert Kiyosaki, author of the Rich Dad series of books, is an investor, entrepreneur and educator whose perspectives have changed the way people think about money and investing.