As I write this, oil prices topped $78. In January of 2005, gas was selling for around $1.75/gallon. Now, it’s over $3.
For any business that depends on transportation or petroleum, we just doubled that line item.
Are you assuming this is a temporary spike, and ignoring it? Are you factoring this into your long-term planning? How long-term? Are you assuming prices will keep rising or will fall?
I’m betting that most people are treating this as a new set level. But the assumptions you make about the future, and the time horizon of those assumptions, will lead you to vastly different conclusions and actions.
So choose wisely. Choose thoughtfully. And it may even make sense to do some scenario analysis, a decision tree or two, and facing unpleasant realities. You might event want to look at data, rather than just thinking wishfully (or pessimistically, for that matter). You might be surprised.
Buggy whip manufacturers got blind-sided when the world shifted to automobiles. Don’t let yourself be blind-sided because you aren’t paying attention to where the world is heading.