Steps to understanding how the BP Gulf Oil Spill can affect your business

Written By Steps To Faculty Published July 6th, 2010

On April 20, 2010 an explosion on Deepwater Horizon, an offshore oil rig, owned by oil giant British Petroleum (BP) caused what is now known as the Gulf Oil Spill. At first the spill was thought to have affected only the state of Louisiana. But, the oil also did affect Mississippi and Georgia also. Despite efforts to contain the free flowing oil, the oil from the rig still continues to leak, although some of the oil to date is being channeled to another rig. June 2010 estimates of the cost of clean up and financial payments to those affected by the largest oil disaster in American history have been approximated at $100 billion in total. Of course, this is a rough estimate as at the time of this writing the oil has now affected the shores of Florida, not just Louisiana and Georgia.

In June 2010, the United States President also requested that BP establish a $20 billion fund to pay the small business owners who lost their enterprises during this ordeal. There have been some issues regarding payments, but some monies have been distributed. With this background, you may wonder how will this travesty affect your own life or business. Take a look.

Step 1 Estimate the costs

Although premature, the cost to fuel your home or small business can increase during the autumn and winter seasons, especially if you are located in the Northern part of the United States and Canada. Why? The demand of oil will remain as the U.S. is still quite dependent on oil. But the actual supply will decrease as other oil giants, such as Shell, are seeking foreign alternatives to oil drilling given increased regulations.

Step 2 Consider the damage to the food supply

Per Cnn.com, the estimated damage to the U.S. seafood industry runs in the billions. Nearly 45% of all seafood in the U.S. comes from the Gulf region in Louisiana. Now that all of that is oil soaked, this industry will see higher prices due to imports from other countries and will have less demand. Expect some of your payables to increase as a result since businesses are often dependent on other businesses.

Step 3 Pay taxes

To facilitate the clean up there is the possibility that your taxes will increase also. This will cut into your net income. Plan ahead for increased taxation.

Step 4 Expect lags in customer payments

Whether or not your customers are from the Gulf region, many of them will face higher taxation and other increased oil and coal prices. Thus they will not pay you on time or not at all. Be sure to follow up with them on a regular basis so that you are not left with unpaid receivables.

Step 5 Keep abreast

As the oil spill saga continues, you need to keep informed about its environmental and economic impact on the general economy, which will in turn affect your business.

Remember that everything is interconnected. Please visit stepsto.com for more great business advice.


Roger Due

Investing in Your Destiny® & Coaching Program - Wealth Building Summit Dallas, Texas

My name is Roger Due and I am from Albuquerque, New Mexico and I am the owner of the Monsano software company. This has been an absolutely fantastic conference. This is the best I have ever been to.