The price of doing business

Citation

Boese, K.C. (2006), "The price of doing business", The Bottom Line, Vol. 19 No. 1. https://doi.org/10.1108/bl.2006.17019aaf.001

The price of doing business

The price of doing business</p

Keywords: Libraries, Disasters, Financial management, Economic conditions, Costs

If there is one slogan every business could share as we start 2006, it would have to be “Prepare to pay more”. One of the more obvious increases in expenses will be in heating oil. Largely due to Hurricanes Katrina and Rita – and Wilma didn’t help. The price per barrel of crude oil hovered around $60 at the end of 2005. Perhaps more importantly, everyone expects higher heating bills this winter as a result of the active 2005 hurricane season. Oil refineries were especially hard hit, and had to make hard decisions on the quantities of gasoline vs. heating oil to produce.

The lessons learned after these disasters, and every disaster, is to be prepared, and yet we are never really prepared. In a survey conducted by AT&T and the International Association of Emergency Managers of 1,200 businesses from January to August 2005, it was found that nearly one-third of US businesses do not have emergency continuity plans in place. This number was up from 25 percent the previous year (Cantrell, 2005).

While no amount of planning will produce a plan that will accurately outline the correct response to an actual disaster, there is a lot to gain from merely going through the exercise which gives management and employees a sense of what to do, who to contact, and how to return to business as normal in the least amount of time. Key issues that need to be addressed are:

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  Communication – employees and managers need to know how to communicate with each other in the event of telephone outages and in emergencies in general.

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  Power – an essential in providing any form of service. Even if the only service that is possible is a general phone message indicating that the library is closed, or a banner on the web site indicating the status of emergency efforts, back up power sources are needed. Because of this, it is best to have back up services that are on a different power grid than the primary institution.

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  Recovery – in order to recover documents, there needs to be something to recover. Appropriate backups need to be made regularly, and, related to the above, need to be accessible from alternate power grids or by other communication services.

Yet, all this planning can be costly, which may be why the number of business that don’t have plans have risen in the last year.

But back to this past hurricane season … naturally, the most effected institutions are those that were directly in the path of the storms. Many of these libraries will require significant funds to repair infrastructure and replace or repair damaged collections. Funds that were not planned for in their current budgets and that will surely impact future budgets.

But don’t think for a moment that those of us lucky enough to have not been in the path of one of these storms have escaped their impact. As stated above, all of our budgets will have to contend with unanticipated winter heating costs. Increased fuel costs can also impact the prices we pay for new materials as shipping and transportation costs go up.

Lastly, we may also have to spend money to replace materials lost in our own collections – even though our collections were “safely” hundreds of miles away from the destruction. Fortunately, my institution only lost four items due to the 2005 storms – books that were out on interlibrary loan. I’m sure other institutions lost more. In the short term, these are items that may need to be replaced, if they can be replaced. In the long-term, this may mean that the number of loan requests goes up to areas most affected by the storms.

What would be most helpful for all of us would be to look for any trends in our institutions that might be related to this year’s disasters and then share this among ourselves. Chances are, this year’s weather was not a fluke. Whether you believe in global warming, or that active hurricane seasons are cyclical, it seems that we will see a few more years of hyper-activity … and if you believe that storms appear in cycles … this could be for another 20 years (Wentley, 2005).

It is easy to focus on the costs associated with a major disaster, whether it is a flood, earthquake, or storm. But let us no let them distract us from everything else that may affect our cost of doing business, not matter how small it may seem. The general health of the economy will always influence how successfully our libraries are funded, and how willing donors may be to give.

Even smaller news items that may escape attention could have far reaching effects. One such announcement was released on November 2nd. The headline from Reuters (2005) was: “Price of stamps going up”, and indicated that the price of sending a first-class letter would increase from 37 to 39 cents. This doesn’t sound like a big deal, especially since libraries send so little by first-class mail. Yet, when you dig deeper into the story, the same commission that that proposed the 2 cent increase also stated that the rates for books and media material was too low to cover the cost of handling that type of mail and recommended a 12.7 percent increase. This is significant, and may mean that some of us will need to reflect upon the fees we charge for interlibrary loan. And, like the cost of gas, the increase in postage for book and media material will impact what we pay to obtain new materials.

So, no matter how you look at it, we are in for some base price increases, and need to factor this into our budget forecasts. By looking at this now, we may be able to determine where these increases will impact us the most. By doing this, we may even be able to identify services and fees that need to be increased to help defray our costs of doing business.

Edited by Kent C. BoeseCataloging Services Department, Smithsonian Institution Libraries, Washington, DC, USA