How To Match Service To Your Location

Paris is a place of glowing lights and glitz, reflections, culture, and beauty. One regional operator in Oklahoma City is inspired to live out this description, offering in her business the attributes of the city of light. Where some operators grow dull and uninspired, the namesake owners of Paris Limousine Of Oklahoma try to dazzle with a dramatic flair, a lot of dedication, and refined, quality service.

Know The Territory

For most operators, corporate and contract work is king. The rates are set and the rides are known. Groups and hotel events bring in the desirable and more lucrative runs. But a select few focus on a little bit of everything to find the right balance. This is certainly the case with Paris Limousine in Oklahoma City. What started as a small operation has grown in size and service over 30 years by creating a mix of business sources that makes sense for the local area.

Fast Facts

Location: Oklahoma City, OK

Founded: 1987

Owners: Jim and Suzy Paris

Fleet vehicles: 69

Vehicle makes/models: Lincoln MKT Town Car, Cadillac Escalade, Ford Excursion and Expedition, Mercedes-Benz Sprinter

Annual revenues: N/A

Client sample: Air Comfort Solutions, University of Oklahoma, Hitachi, Hal Smith Restaurant Group, Schlumberger

Corporate/retail mix: 40% / 60%

Website: www.parislimos.com

The Midwest has different demands than the travel centers of New York and Chicago. Knowing what works in the flyover states has made the difference in this company’s expansion. For owner and founder Suzy Paris and her family, the formula for success in a broad region depends on recognizing local needs, creating and growing local personal relationships, and then asking for referrals no matter the type of work.

Finding clients at first can be a challenge for any operator. Paris, like many, has found over the years “word of mouth is better than advertisement.”

“We have built up more clientele just by asking our clients to tell a friend if they had an enjoyable experience,” Suzy Paris says. The website helps too with weekly updates to keep things fresh. Clients may book online, “but we still confirm the reservation and have an actual conversation with our clients.”

Business Bonds

Contracts have a place, but in a location with fewer large corporations than bigger cities offer. Paris Limousine wisely connected with local medical facilities and funeral homes. These two business sectors make up more than 55% of Paris Limousine’s daytime work, a staggering percentage. Spread among various locations, this strategic alliance has Paris transporting surgical teams for organ transplants, rush surgeries, and medically related work.

Funerals remain a reliable mainstay, many with white stretches becoming more common in this area. Unlike California where limitations have made stretches difficult to sustain, stretches are “still a thing” among Midwest customers. Paris Limousine has even seen recent growth in this area, so whether it’s a funeral or a happier event, the new Expedition stretches have been a good investment. These rolling assets fuel growth because this operator understands her territory. Combined with smaller corporate accounts, the weekdays keep a large percentage of the cars running regularly that would make any operator envious.

Where Retail Rules

It’s the weekends that really glow. While most of the industry has shied away from the fickle retail consumer, Paris Limousine has embraced it with gusto, grace, and glamour. Special events, weddings, funerals, proms, and parties fill weekends and evenings in Paris Limousines vehicles — 69 garaged vehicles, that is. This is a substantial operation that keeps growing, not through advertising, but through its reputation for innovation and quality.

Paris Limousine competes with seven other companies and hundreds of TNC operators. “But we never advertise,” Suzy Paris says. “We don’t go cheap, either. We invest in our website to keep it fresh and drive traffic, and we have great vendor relationships. Our clients love our quality, our communication on various social media, and we deliver,” she says. “Word of mouth keeps us alive and relevant.”

Weddings and prom season is a calculated boon, too. Working with local wedding venues brings in a lot of business. When a new venue opens or new wedding and event coordinators initiate a business, Paris Limousines reaches out to establish a connection early.

For proms, such sales determination brings in business. “Our office team reaches out to each school district every year to get the date of the prom. Then we will reach out to past clients from those districts. If they have graduated, then we let them know they can offer their return client discount to someone, as long as they have not used our service in the past. This has been extremely successful.”

This hands-on approach reaps rewards through expanded exposure and a larger client base.

Vertical Horizons

Wise expansion has been part of Paris Limousines’ trademark growth and profitability. Husband Jimmy Paris entered the automotive world by joining a vehicle dealership he now owns. With this supplier/buyer relationship, economically wise purchases can be made for livery vehicles. Cars and depreciation do cost every fleet operation, and this secondary business is a financial complement for Paris Limousine’s vehicle needs. This natural match keeps the fleet fresh while being economically smart.

Paris Limousine recently expanded into the gas station and convenience store market. Some operators who can store fuel and buy futures have also tried this tactic hoping that the purchase of gasoline futures would control costs. As another maverick move, Paris Limousine decided to do it on the retail side, too. Keeping fuel prices in check is helpful, especially while other retail users help pay for it at the going street rate. If those customers buy a carwash, snack, or soda, the margins are considerable, and this horizontal retail expansion helps fuel the livery operations, too.   

— adaniells@outlook.com

Family Approach Brings Success

LCT asked Suzy Paris how her company distinguishes itself as one of the largest limousine operations in three states. In her singular, warm, and straightforward style, Suzy shared her thoughts:

I cannot really say what we do differently from the competition. We try to focus on what we are doing only to make sure our clients are happy. As long as we continue to offer top customer service, listen to our clients concerns and address them in a timely manner, offer the best chauffeurs in the industry, and the most beautiful cars, then we have no doubt it will be seen by all clients: past, current and future, and will pay off in the end.

We believe in hands on — our team is myself, Jimmy, and our daughter, Jennifer. We have a right-hand guy named Noah who has been with us for 10 years. He handles all aspects of the company. We are a team. Jennifer and Noah communicate like brother and sister. This is critical to us and our success. We have been doing this for 30 years, and a good family and marriage equals success.

Would I start this all over again today? No. But will we hang on and grow a company for 30+ more years? Absolutely!

Keywords

business expansion   customer service   family businesses   Oklahoma operators   retail markets   stretch limousine   

 

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How To Work With Brides On A Budget

What do you do for a wedding that has no real budget? Discover what the engaged couple really wants to know and how you can help.

Transporting wedding guests has become more common in recent years, especially with destination weddings growing in popularity. But with this comes a price tag for transportation — often in the thousands. So, if a bride or groom calls with champagne tastes and beer budgets, work the call so everyone gets most of what they want. If the budget is limited, find out what most concerns the new couple.

A desire to transport festive attendees safely may be more important, for example, than a fancy get-away car, and their priorities will determine where they spend a small budget.

In the April 2016 issue of LCT, an article provided all kinds of ways to increase the revenue from a wedding, making it an event that truly spans days with multiple little occasions from bachelor parties to rehearsal dinners. [see article pp. 20]

With less money to spend, the conversation around transportation should be a bit more collaborative. For those couples whose goal is to keep guests safe but limit spending, consider these ideas to make the cost more affordable for young couples on a tight budget. While we’re in this to make money, remember, transportation is not yet considered something that must be provided to guests. So if you offer options, it may keep this source of business coming your way.

• Remind the bride and groom the hotel might offer a free shuttle. This may relieve them to reserve transportation for the wedding party only or take care of the specialty rides for special guests like great grandmothers.
• Coordinate passenger-paid rides. Most couples have websites with wedding information for guests. Ask to be included on that site as an alternative for guests who want their own chauffeur or need an airport transfer. Just getting your company name on the engagement website will drive guests to you directly and cost the bride nothing, yet the guests will see their transportation needs were considered, even if they are the ones paying for it.
• For shuttles from a hotel to a wedding site, can you forego the full hourly rate while just sitting at the venue? Sure, it’s the ideal gig as an operator, but if you own the vehicle, maybe you can charge for two less expensive transfers, buy a nice lunch for your chauffeur in-between, and still make money on the deal, especially if the wedding guests book you privately.
• A family with limited means might actually promote your service if it means getting a discount on the wedding day. If you get a dozen airport transfers, maybe you can drop your wedding day rates by a pre-set percentage.
• Be extremely clear about costs and overtime. State everything in the estimate, including tip. Service cost surprises are particularly unwelcome on emotionally-charged days like a wedding. Try to get the wedding planner, if there is one, involved. Even if it’s crazy Aunt Sally, that person will work to keep the costs down and people moving on time better than a chauffeur ever could if they recognize what a delay will cost.

Understand the couple’s priorities, and you may find a life-long client. A specialty getaway vehicle with champagne just for them may be all they want for photos and fun. But for the bride who is happy on a bicycle while her guests are safely transported, your cost-conscious suggestions and flexibility will be the best gift of the day.

California operator Anne Daniells has more than 25 years of experience in corporate America and the limousine industry, and once owned an LCT Operator Of The Year Award-winning limousine company. She can be reached at Anne@lctmag.com.

Keywords

Anne Daniells   Ask LCT   client markets   customer service   hotels   How To   shuttle vans   special events   Trolleys   wedding planners   weddings   

 

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What Traveling Women Really Want

Girls just wanna have fun, it’s true. And maybe diamonds could be their best friend, but don’t let those light-hearted adages mislead you about what female travelers want and need.

These days, nearly 25% of business travelers are women, and they have different risks and concerns associated with journeying solo. A recent Business Travel Executive (BTE) article interviewed Michell Lee, founder and CEO of Women in Travel (WINiT), a network of women and men who support the development of women in the business travel industry.

“In most cases, I hold the view the challenges we face with international business travel are gender neutral,” Lee tells BTE. “Women and men both need to educate themselves on local laws and customs, ensure they adjust their approach out of respect for each culture, and familiarize themselves on high risk locations. That said, there is no dispute that physically women are at a disadvantage when it comes to safety and security.”

Know Your Client’s Needs

With the endless headlines on how transportation network companies (TNCs) give short shrift to safety, chauffeured transportation companies have a golden opportunity to show how they provide superior travel experiences for women. Constantly looking into how to improve this sense of security can lead to preserving and growing your market share among female business travelers.

Duty of care normally refers to the security and safety we bring to our clients. It requires we act toward others with watchfulness, attention, prudence, and caution based on the circumstances. However, maintaining duty of care for female travelers adds increased responsibility to our standard chauffeured car service. This isn’t hard to understand once you realize the difference in the watchfulness and attention women have when traveling alone.

Consider this: Men simply don’t do the things we do. Men don’t carry keys between their fingers, ready to harm an attacker, but women do this on every street. Men don’t worry about who is behind them in hotel hallways, but women notice it every time and will even walk past her own door until the male hotel guest goes into his room so he doesn’t know which room houses a female. We drop back after exiting hotel elevators so males are in front of us and not behind as we go to our hotel rooms. Descending to an underground parking lot may be a little uncomfortable for everyone who has watched enough film noire, but for women, it is very real — we often wait until another group is going down so as not to be alone in an isolated location. We aren’t necessarily paranoid, but precautious in providing our own duty of care. If a chauffeur has the same awareness, trust is built quickly.

Safe & Secure Women

Safety is part of our industry’s primary offerings and benefits. Our background checks, training, and DMV pull programs help ensure clients are in good hands. Unlike TNCs that do little to guarantee the integrity of their drivers, the limousine industry pledges to deliver a secure service.

For female clients, taking an extra step or two will help add a great sense of comfort and safety. Try these service tips for securing your female clients’ safety and their repeat business:

• Pre-pay for the ride: For female clients in the U.S. and abroad, eliminate the need for cash by always taking credit cards as payment for the complete service, including tip. The transaction is safer for both parties financially, and it also prevents a woman from having to open a purse and expose cash and credit cards. If this is not feasible in your operation, be sure to complete the transaction before the vehicle is unlocked and the doors opened.
• Offer female chauffeurs: In general, women trust women more than men. It’s a bond of safety we nurture, and a female chauffeur will ease fears of being with a strange man in a strange car, especially in a strange locale. Hire enough women yourself so you can offer women an alternative, and expect the same of your affiliates.
• Text or call at the airport: Landing in a strange airport alone has its perils. One of the most comforting gifts for any traveler is receiving a text or message as soon as a phone can be turned on while taxiing to the gate. Simply knowing the name of the chauffeur and how to reach him or her is very reassuring. No client, especially a woman, wants to wonder if the ride has arrived, nor does she appreciate being stuck looking for a reputable taxi driver or other ground transportation. Being alone in a strange place raises all sorts of warnings for women, so put them at ease once the plane is wheels down.
• Photos: Even better, invest in software that sends the chauffeur’s photo to make it easier for the client to find them. This also alleviates some fear in the wee hours. An early flight means a very early pick-up from a strange person at your home who knows your residence will be empty and vulnerable. Recognizing a pre-screened friendly face adds a modicum of safety.
• Confirm names and destinations: Just because someone has a sign with a name on it does not mean it feels safe to the female traveler. Telling travel plans to a stranger does not always feel comfortable. Just recently, I heard about a female client who did not want to give her name and destination to her male chauffeur. She figured he should already know that. Of course, he could have handled this in a variety of ways, simply by confirming her last name for starters. We must confirm we have the correct passengers, but we must also put them at ease.
• Luggage assistance: This is standard, of course, but it’s especially helpful for women. All those shoes get heavy, after all. This may not be a matter of safety as much as it is one of gender strength, as lifting a bag from a trunk is not easy. The person who invented luggage with wheels deserves a prize, but a little help goes a long way when a woman’s computer and personal bag keeps slipping off her shoulder.
• Offer a hotspot: This may seem like overkill, but I’ve heard female travelers ask for Wi-Fi in vehicles so their phones or computers can be tracked if anything goes awry. A physical assault would be terrible, but not being rescued quickly would be worse.
• Drop in a safe area: Drop off locations at larger hotels are usually well-manned, but boutique inns in a strange city at midnight or lower vacancy budget hotels in suburban areas can be dark and eerily quiet. If there is room to leave the vehicle for a moment, just walking a female passenger to the front door with her luggage alleviates some concern and adds a layer of security. Or at least wait until she is inside, especially if the hotel locks doors to non-keycard holders after 11 p.m.

Duty of care for women may be a touch more difficult than for male passengers, but since women make 80% of travel decisions, it is a small investment for future success. Cater to women, understand their needs in travel, and you will become their valuable diamond in ground transportation.

— adaniells@outlook.com

Keywords

chauffeur training   client markets   duty of care   passenger safety   safety   TNCs   women in the industry   

 

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Why Party Size Matters

One of the coolest things about social media in this industry is the ability to quickly find affiliates in unusual markets simply by asking for the help. Or getting solid advice to improve your business. Generally, we care about other operators and offer constructive suggestions when problems arise because we want the industry to succeed.

The LIMO Facebook page recently shared some excellent suggestions on how to control clients who like to change their group size without telling you.

Chris Vecchio of ChiTown Party Bus in Chicago and Brian Whitaker of Chicago Transport Solutions both found themselves in unfortunate situations. They sent confirmations for rides showing the vehicles assigned and the passenger capacity. This may seem unimportant, but they caused service and profit problems.

For Vecchio, this meant a client who booked for 10 passengers. As a kind gesture and for client comfort, he generously chose to put them in a 14-passenger vehicle priced on the lower capacity vehicle. Unfortunately, the confirmation referred to the vehicle capacity of 14, and when the larger vehicle had a maintenance issue, this operator naturally sent another vehicle — one with a capacity of 12. Should have been fine, right? But the client showed up with 14 instead of 10 because the confirmation gave her too much information. So much for being nice. Truly no good deed goes unpunished.

Likewise, Whitaker often sends his larger 55-pax motorcoaches when the 47-rider capacity vehicles are booked. His affiliates know this and sometimes ask for 47 passenger quotes knowing he would get a larger vehicle for a lower price. Geez, with affiliate friends like that, who needs enemies?

Confirmations are a written contract that hold clients and operators to an agreed upon service and price. While several operators gave the appropriate advice of only confirming the agreed-upon number of passengers, HF Grady also offered a well-worded warning for those clients who would take advantage. Here is a simplified version of it that should help eliminate lost profits.

Based on availability at the time of booking, we may send a vehicle larger than requested. Regardless of the vehicle we choose to send to you, if you have more passengers than you agree to on this confirmation, we reserve the right to charge additional fees to cover any additional costs that we incur by your unconfirmed change in passenger count.

Treat every confirmation like the written contract it is. Only put the agreed upon passenger numbers and vehicle types on confirmations, and add a caveat like this to protect yourself.

California operator Anne Daniells has more than 25 years of experience in corporate America and the limousine industry, and once owned an LCT Operator Of The Year Award-winning limousine company. She can be reached at Anne@lctmag.com.

Keywords

Anne Daniells   Ask LCT   motorcoaches   party buses   Social Media   vehicle safety   

 

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What To Look For In Financing Your Fleet

With more vehicle manufacturers and brokers offering no down payment and low interest rate financing for vehicle purchases, or even “no payments for 90 days” options that increase borrower costs, how might this affect industry operators? After all, not everyone can afford to pay cash for a vehicle. Financing access is critically important for keeping fleets fresh and reliable.

The question is whether a non-traditional loan structure makes sense. The answer varies for every car buyer. Whether it is a single vehicle purchase, a fleet expansion, or a bulk buy, the pricing for those who do not pay cash can potentially make or break an operator’s cash flow.

Every operator must determine what vehicles are needed and when. This requires knowing the total cost of ownership and acquisition — the cost of buying, running, and maintaining each individual fleet vehicle so information can be compared to the revenue a vehicle generates. Mileage, warranties, and vehicle demand certainly all play a role in the final decision, but these basics help determine if a car must be replaced annually or if it can be run much longer.

When financing a vehicle, no one should be paying for one that has aged out or is no longer earning revenue. The life of the vehicle should not be shorter than the loan term. Once calculated, there are still several options offered on vehicle loans that can affect the true measurement of vehicle cost in the form of financing.

Options
Let’s look at some of the loan characteristics that sound like they save money for a buyer. Some are excellent deals, and others deserve cautious consideration.

No Down Payment
This option on a loan makes the initial cash requirement zero. With a no-down-payment loan, the full value of the vehicle is financed at the agreed-upon purchase price, but no “up front” money is needed to close the deal and drive the car off the lot. Depending on local regulations, licensing and registration may need to be paid separately, but those are smaller cash outlays. The great part about this loan feature is it preserves operating capital for owners. In this cash-tight industry, the advantage is clear — less capital is needed to get into the car, and the asset itself can start earning right away, even before the first payment is made.
One view believes in paying for the asset as you go — in that way, the revenue it creates pays for its cost along the way. This idea makes the no-down payment attractive, although there is no equity in the asset. If managed perfectly, paying for the cost of what is used as you use it, then by definition, the asset was worth what it sold for at the end. Only monthly payments are involved with no bulk cash payment at the start or end of the financing.

One difficulty with this option is it requires “good cash flow and stellar credit,” says Mike Villani of Access Leasing in New York. “We would never want to put a customer in a bad situation,” he adds. Some clients who would qualify for a loan with no down payment often reject this option to lower monthly payments even more, and maybe to qualify for a larger loaned amount.

The possible downside to this type of loan becomes clear when and if the car is no longer usable, but a sizeable amount is still due on the loan. For example, the vehicle could be in an accident, and the insurance company considers it totaled at its current market value, but that value is lower than the amount due on the loan. The operator still must pay off the loan. Now, if cash is available, a situation like this may not be as painful. After all, the cash was used to run the operation for as long as the vehicle was in service. It is unfortunate, but the total loan payments would be the same. However, if no cash is available to pay off the loan, the buyer has to make payments on a vehicle that no longer exists. Ouch.

This same situation of paying for a non-earning asset could also occur if a client demands a certain vehicle like a shuttle, but then the contract is not renewed, and the operator has a fleet vehicle with no immediate use or paying client. It can be a real cash burden for most small- and medium-fleet operators. The only way to avoid this is to perfectly use, pay, and depreciate over the term.

Zero Percent Financing
This loan option has no interest charged on the loan. This is a great deal — to borrow money without having to pay more than what was borrowed. It is something occasionally offered by vehicle manufacturers to move their inventory for newer models on the way to the showroom floor. The dealer still makes money on the purchase price and is choosing to forgo the additional profit of interest. For operators, it is a deal worth searching for to lower the total cost of a loan. In addition, with no interest expense, monthly payments will be lower than they would be with interest added. A 0% loan could require a down payment since the lender is taking a greater risk, but that depends on the buyer’s credit and the loan’s parameters.

A buyer who chooses this option sees few if any financial downsides. Nonetheless, it is probable that the vehicles offered for sale with this option are less popular, or will be a model year older than a competitor’s vehicle. But a well-priced deal is a good deal. When body styles have not changed for a new model year, and the dealer is willing to offer zero or low interest, it can be a wise purchase. But buyer beware. It may also be that acquisition incentives, discounts, and rebates disappear with 0% financing. Instead, the buyer may be exposed to an overall higher purchase price to compensate for the lost interest.

No Payment For 90 Days
This option defers the first loan payment for three months. Villani is “not a big fan” of this loan option because it ultimately costs more in the long run as the bank spreads out the interest for those 90 days over the much longer life of the loan. “I try to talk them out of it,” Villani adds, even if they meet the stringent qualification requirements.

Sometimes there is good reason to take on a more expensive and riskier loan like this. Perhaps an operator chooses it because he knows cash flow is rising in a short time, and he needs the new vehicle sooner. Occasionally, dealers offer this specifically in low seasons, so an operator can have the vehicle sooner but not pay until business picks up during a higher-volume season. Or a contract for a shuttle, for example, may require a new vehicle to serve the client, but the revenue payments won’t start for several weeks.

Unfortunately, this feature accrues interest on the full loan amount during the 90-day period, so it is more expensive for a buyer over the loan’s term. However, certain situations require a specific or custom-built vehicle be available, so a loan that allows the vehicle to be built might make the most sense for some. It may be combined with other features, too, like no down payment.

With this option, the risk to buyers is like a zero-down program. In addition to its higher overall cost, if there is an accident or the contract doesn’t come through, an operator may be left with an unneeded vehicle. Selling it will happen at a lower price, and the increased interest over 90 days combined with the vehicle’s months of depreciation will cause an operator to lose money. In addition, you’re instantly underwater and have negative equity in the equipment. If those initial payments are not affordable, it is unwise to move forward.

Finding The Right Fit
Because so many operators must finance their fleets continually, making the best use of loan options must be tempered with financial prudence. Knowing your finance company and making them a business partner is always good advice. They have the experience to suggest what works and foresee problems, even if you qualify.

If your lender knows the industry, you will get better advice, too. The many lenders who exhibit at International LCT Shows have years of livery experience. They know the life spans and costs of different manufacturers. Limos and shuttles are familiar assets to them, and a good partner also knows your regional demands. Everyone’s situation is different. Let a professional walk you through proven programs.

If you are starting out, ask for recommendations, visit the finance companies at the Show in March, and always get offers in writing. Once you find the right partner, it could become the company that helps you through years of growth. Even better, industry commercial lenders often will put together an overall acquisition program and line of credit that allows for the continuous replacement of vehicles. That type of relationship borrowing — rather than transactional, one vehicle at a time — may reduce the overall risk and cost of turning over your fleet.

What If Things Go Bad?
Loans will not usually present a challenge if you get the right loan for starters. One critical component is the value of the vehicle at the end of the lease or the financing term. Often, operators will find themselves upside down, further complicating the process of getting out of the old asset and into the new asset. Even if you’ve planned well, Mother Nature’s fury or an accident can take out a financed vehicle. Unfortunately, this can threaten cash reserves and credit ratings.

This is where that established and trusted partner is even more valuable. Villani and his team arranged all kinds of exception financing when Hurricanes Sandy and Katrina hit. For those who had no revenue and had to recover, payments were sometimes deferred or loans were rewritten. No one wants to take a vehicle back from an operator, so someone who knows your needs will be able to better help in times of trouble.

If you choose to take a lease or loan directly from a manufacturer, they have no recourse to you beyond expressed warranties. Some are known to help in selling a vehicle no longer wanted and will use the proceeds to pay off the debt, but it is rarely enough. A lender partner is different in this regard and has more ability to restructure financing in addition to assisting with unloading an unwanted collateralized vehicle. Let a good business partner help recover potential debt losses with you.

With a solid lender behind you, there is no need to worry about being offered unscrupulous loans that could hurt your financial security. By not overextending, being prudent, and still taking advantage of great options, financing will be a smooth activity that enhances your cash flow and improves your fleet.

Keywords

finance   fleet financing   Fleet Vehicles   new vehicles   used vehicles   Vehicle Loans   working with a dealer   

 

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Don’t Get Stung By Two-Timing Wasps

This industry is somewhat unusual in its cooperative yet competitive nature. We need other operators within our own market to make us successful. They fill in for us; we fill in for them. We represent another company, and we use its logo and name when we greet passengers. We use generic chauffeur cards so the client will feel as if we are an integral a part of a distant farm-in company they know by name. And we do this even if we would love to have that client for ourselves. Even if the client really knows we are an affiliate. If we do it right, we earn a reputation of integrity and reliability. And given the wonderful operators I’ve met over the years, most do their best to provide top-notch service so we will reciprocate and give them business, too. But not all are so honest.

Every job has its frustrations, but few things raise ire more than shady operators. Crooked dealings abound when opportunity meets lack of integrity. When we cooperate like we do in this industry, we actually hand a client to a competitor and expect him to be our ally. So what do you do when a “trusted” affiliate does the unthinkable and stops representing you while on the job? Maybe the chauffeur hands a business card to a passenger to get another run privately, or an affiliate owner approaches your chauffeurs at the airport.

If you’re lucky, a good client will call and tell you what happened. Or a chauffeur will mention a conversation at the airport that only has corrupt intentions. Imagine how often it happens and you never know.

The airport is a hive of activity. Chauffeurs see each other all the time and are familiar with companies in the same locale. The drivers swarm at pick-up areas in a nest of baggage, travelers, and other operators. Unfortunately, some go rogue and break the code of conduct among affiliates by staking out your clients or your chauffeurs.

Now, competition is fine, and a client won by good salesmanship outside of affiliate work is fair game, but when an unscrupulous affiliate makes moves directly to chauffeurs or clients, you must spread a bit of repellent to let them know it can never happen, again.

And when it does, they need to be exterminated. Not just dropped as an affiliate — they need to be removed from the business hive with shame. Instead, honor your employees and other principled operators by sharing your story of shady behavior. This industry self-educates, and you have a responsibility to tell the truth and inform others about untrustworthy affiliates. There’s no need to slander or name call — just tell the truth. There are ample social media outlets with strong followings, and industry trade shows and networking groups that will want to support good, honest operators. Be one of them, and keep the vile insects out of our honorable collective.

California operator Anne Daniells has more than 25 years of experience in corporate America and the limousine industry, and once owned an LCT Operator Of The Year Award-winning limousine company. She can be reached at Anne@lctmag.com.

Keywords

affiliate networks   Anne Daniells   Ask LCT   business ethics   company culture   

 

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How To Find The Right Financial Services For Your Business

While every business needs accounting to produce accurate financial statements, not every business needs to do it the same way. With the endless variety of accounting systems, the tradeoffs of insourcing vs. outsourcing, and the complexities involved in taxes, it is no wonder why so many operators struggle with these difficult decisions.

Many operators know their industry, but few know how to read complex financial statements or optimize tax positions. Therefore, it is vital to accomplish the requirements of accounting in the best way.

Many of the most important questions are inter-related. Perfect individual answers are not easy to come by. Still, the questions and concerns remain:

• Why is accounting important?
• Should I outsource my accounting, or should I hire an accounting department?
• Does the same resource provide accounting and tax services?
• Is my business big enough to justify creating budgets and forecasts?
• What does a CFO do and how does it differ from these other responsibilities?

Vital For Operations
Whether you are a startup one-car operation, a medium-sized family business, or a large corporation, you should measure your financial performance. After all, these are for-profit businesses, not charities or hobbies, so how you profit (or do not) is one of the most critical factors to measure. Accounting is a common, scientific language that uses set standards, processes, and rules to transform a company’s performance into readable and understandable data. The rules of accounting are generally consistent across nearly all industries. Following those rules allows a business to understand what is going right versus wrong, and what to do about it. It provides the score and report card for the business. It is critical you do that work correctly.

For that reason, most accountants look to Generally Accepted Accounting Principles (GAAP) as the standard for businesses to follow. These rules are captured in volumes of documents, and updated regularly, which is why you should stay abreast of them. They are also difficult to understand, decipher, and apply to your business situation. Still, several overriding important elements should answer the other questions raised.

One of the most important elements of GAAP is the separation of duties — that is, no one person should perform all the accounting duties. Rather, they should be divided so different participants conduct various aspects of the accounting process. By dividing workloads, we avoid conflicts of interest.

Another important aspect is the notion of matching — that is, revenues should be accounted for in the period earned; expenses follow the same rule. This is the notion of accrual accounting, a higher level of accounting than many bookkeepers can provide. With experienced accountants, improved accounting methods can be used. So how should accounting work in your business?

Balancing Your Accounting Needs
If you already have accounting capabilities in-house, you likely do it on your own as long as there is more than a single person. If you do not have enough or the right type of in-house resources, then the best solution is outsourcing.

In today’s accounting services market, outsourced services are common. A team of accountants from different backgrounds and specialties provides fractional resources on a budget and with services agreed upon. The most mundane responsibilities of balancing merchant statements and recording bank and credit card transactions are completed by the staff accountant. A senior accountant then checks and reconciles them. Reconciliations are reviewed, and an accounting manager creates the analysis. If appropriate, a CFO meets with the owner once a month to discuss the effects of the prior month, how they differed from the budget, resulting consequences, and what the operator should do about it.

This team approach typically ranges from $2,000 to $6,000 per month depending on the services provided. Still, they are less than the cost of a single employee and provide the insurance of degreed and certified accountants performing the duties in a safe and secure way.

In these arrangements, the team can use an accounting system already in place, or they can assist in putting up a new system. Most often, simple systems such as QuickBooks are adequate. Licenses are annual, so you can pay as you go, and most accounting services know how to use the system. Reports will be tailored to meet the business’ needs, thereby creating other benefits:

• Payroll can be run through QuickBooks. If you already have a payroll service, you might find insourcing the payroll function, in the hands of professional accountants, could lower the price and speed up the processing of payroll.
• Annual report requirements can be supported. If you use a single resource, the time requirements and legal risk associated with end-of-year reporting (like 1099s), tax preparation, partnership, and corporate filings, create unnecessary business risk. Accounting service firms provide this relief as well.

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Taxing Solutions
Clearly, using a variety of resources is better than using a single one. Similarly, using separate tax and accounting services is better than working with a single firm. While that may seem inefficient, the practice allows you to work with specialists, each with a different set of eyes all intended to protect your interests. The accounting firm creates a set of financial statements the tax firm optimizes. Knowledge of how to create the financials is different than the knowledge of how to optimize its tax treatment — two separate firms are better.

Remember a bigger firm is not necessarily better. Often what you get from the “Big 4” international accounting firms are high prices and newly-hired college graduates. The premium paid for that prestigious signature on financial documents is, most likely, not necessary for small- to medium-sized business. Instead, choose a local or regional tax firm. Identify what firm to use by getting referrals from your accounting firm, your business banker, or from the local chamber. Working with local firms brings added benefits such as lower costs, deeper interest, local knowledge, and referrals unavailable when working with the big firms. Most important is the quality of the people working on your account, and a seasoned and local tax firm will more likely provide a better service.

Finally, it should be noted outsourcing of professional services does not end your responsibilities. When using multiple resources at different entities, communication becomes more important and something you may need to coordinate to get the full benefits of the services you buy. Unless you are skilled at conducting these relationships individually, you would be well advised to get these parties to communicate with each other and with you. Regular meetings should occur to ensure all parties are on the same page. While each seeks to protect your best interests, your financial reports and plans require communication and coordination to ensure correct implementation and continued viability.

Do I Need A CFO?
In many ways, coordinating all the pieces of accounting and reporting is the job of a CFO. While many businesses consider themselves too small to afford a CFO, they are the ones who most need the CFO’s expertise. Rather than a pure accounting responsibility, the CFO acts more as a conductor and coordinator of the professional services around the business. The CFO speaks the various languages, understands how to transform business strategy into economic principles, and always seeks to optimize the business. Don’t underestimate what this set of skills can add to your operation.

In a fractional environment using part-time, on-demand services, the CFO has the responsibility as the last line of defense. The beauty of modern services is this can be achieved without permanently hiring. By using a strategy of coordinated outsourced accounting services, the CFO, the accounting manager, and the staff and senior accountants all can be a part of your team. And they use the most current systems armed with the most current laws and regulations specifically tasked with properly accounting for your business. Hiring this expertise in-house is impossible for most operators, but with fractional services, the costs may equal a good salary. But you get a team with multiple areas of expertise to properly and legally document your business’ financial performance. For nearly every livery operator, outsourcing is the way to go to lower cost and improve your reporting compliance.

Keywords

accounting   finance   financial planning   profits   

 

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A Solution To The Car Seat Shuffle

Making Car Seats Worth It

A family traveling with children often asks for car seats or boosters. Parents have them at home, and at their destinations, but just for the ride to or from the airport, we livery folk often provide the seat. This seems to be a standard offering, sometimes as a free courtesy or for a fee. But the transaction is seldom the premium service it should be. Like many other specialties, it may be wisest to outsource this amenity. Parents, law enforcement, drivers, and your insurance company may all be happier.

What To Provide

Travelling parents cannot possibly know the car seat laws at every destination. If operators provide the seats, shouldn’t we know the rules? This is a legal issue that will sour parents, police enforcement, and your insurance company. Just look at the differences between some of the largest states. New York is comparatively lax, while New Jersey is extremely specific — driving across these two state lines with a child in the car is taking a risk because the rules change a lot.

Keeping it Clean

Every insurance company that insures our fleets says we and our employees should never install the car seat because we should not take on the liability of proper installation. But if we transport car-seat-aged children, we will always be liable for safety. Add the safety issue of bacteria and grime left by previous occupants, and it is easy to understand why insurance agents and parents are not pleased with car seats and boosters.

Don’t Go It Alone

Imagine opening the trunk at the airport pick up location and having parents see their child’s travel needs already there, including a playpen and stroller. Many airports have rental services that make child travel easier for parents and smarter for us. Companies like Baby’s Away and Toddler’s Travels offer sanitized rental equipment that is legal, insured, and professionally installed, often right at the airport.

Rather than stockpiling banged up seats we know are never cleaned, consider offering to pick up exactly what parents order for a car seat, have them professionally installed, and even pick up the rental stroller and playpen while you’re at it. Then, we can charge a premium fee for an unquestionably first-class service.

Let LCT know your experience with these services in a future issue.

Keywords

Anne Daniells   Ask LCT   child safety   customer service   liability   

 

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Ready For Affiliate Work: Are You In or Out?

A simple veggie plot in the backyard churned out organic surprises now gracing the shelves in cans of jam and tomato sauce for winter. The cultivation of these farm goodies create sustenance no matter the season.

The simple farming we do amid the soil brings growth and bounty — farming in the livery industry is no different. If you like things as they are, then do nothing. But if you want to grow your operation, planting the seeds for successful farm work is a must. With the March International LCT Show looming, ripe for networking, now is the season to till and reap.

Farm work in this industry comes in two ways: In or out. Structures and agreements may vary, of course, but deciding to partner with other operators takes some time and consideration.

The timing of expansion into farm-in and farm out is based on one primary desire: To grow revenue and profits, increase use of resources, and create relationships.

This industry is one of a few that depends on affiliate partners. We are both competitive and cooperative. We look for market advantages and sell against the same operators who we trust to treat our clients with care. It is a balancing act of sales initiative and integrity.

Know Your Local Farmers
Local farm-in and farm-out work is fairly standard, even with small operators simply because this industry must fulfill its promises to clients. When the manifest changes and help is needed, knowing your local operators is critical to your success. Giving a ride away to your local, organic market operator is actually the more profitable thing to do sometimes, depending on the ride and availability of vehicles and chauffeurs. Calling someone in for one ride on a quiet day for a 15-minute ride probably is not profitable. A trusted local company might be the smarter alternative, so keep your competitors close and work together.

On the flip side, local farmed-in rides are often not very profitable, but any local farming must go both ways. Since the industry has a fairly standard discount of 10%, taking a cheap ride might not yield any profits on its own, but consider your internal needs. Farm-ins might fill in the idle hours between rides on a slower day, increasing driver and vehicle efficiencies.

FOR MORE INSIGHTS: To gain affiliates, LCT will offer its B4 Business Speed Networking, Sunday, March 12, 2017 from 5 p.m. to 6 p.m. during the International LCT Show at the Sands Expo between the Venetian and Palazzo Casino Resorts in Las Vegas. The session features a time structure that will allow you to practice and perfect your “elevator pitch” for gaining affiliate work. You will come away with actual referrals to help build affiliate connections. Participants want to succeed at the next level. Limited to 100 operators. More info: www.lctshow.com

Farm-ins may be hourly rides or rides in larger vehicles that supplement a group move. These are certainly more profitable, but even a break-even ride helps pay for the cost of the vehicle and operational overhead. If you have excess capacity in idle cars or chauffeurs, expand locally and start covering costs of service delivery. Certainly, chauffeurs will be happy to work no matter whom they represent. There is a symbiosis here that helps both operators grow in healthy ways.

Out-of-Market Farming
Imagine if someone else did your work, and you got paid for it. That describes the farm-out business. Growing your network outside of your market takes effort and commitment, but it can be lucrative. Short of expanding into markets through acquisition, cultivating partners in other markets is an economical way to grow volume, reputation, and business relationships. It’s a smart move when you can get your cut on every ride in another town with little to no costs.

How do you know the players? You must be present — not physically in every city, of course, but be visible and develop the relationships through online presence, occasional in-person visits, and attendance at major shows. The most-oft cited reason for attending the International LCT Shows in Vegas is networking. Not just for friendships or good deals, but for business. If you are walking away from a show without expanded contacts in your clients’ destination cities, you are leaving bushels of money in someone else’s basket.

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Ask for the Business
Know where your clients travel. You’ve been booking their flights to Norfolk or Boise for years. Find the operators there, and ask if they would like your business (they will say yes). Get the paperwork and insurance covered, and start asking your clients on every ride if you can arrange for a pick-up to their hotel from the Boise airport.

Visit your corporate travel managers and administrative assistants to let them know you provide full service in their markets. Stress the simpler billing and single-contact service. Take it a step further with the use of travel booking tools to ease the transaction even more. Just know you want to grow, and then nurture these local relationships. Soon, they will be calling you to handle a meeting in Florida or San Francisco while someone else does that actual driving, waiting, and paying for the fuel. It’s a recipe for success.

Farm Operations
This all sounds so easy. It can be, but be sure to consider all the operational aspects of farming. Your goal is to profit by satisfying a client’s fundamental travel need, and your client must feel comfortable in the vehicle, no matter the market. Vehicle type may matter, for example, or having every chauffeur dressed in black and white may be what works for your clientele. Each affiliate represents your brand, a delicate matter, so be straightforward about what level of service you expect. Communicating clear expectations is key to producing a successful relationship for everyone involved.

The gritty side of farming out is the back side of the transaction. The mélange of various internal departments makes for a smooth operation. When farming out, software that integrates well eases accountability and accounting. Dispatchers will need to call to other cities on each ride to ensure the chauffeur is on the way and on location. And billing and collecting credit card payments can take some time — there is work within the office, to be sure. But remember, this work is part of the overhead already there.

Farm-ins are a little different because you are the one representing someone else’s brand. It requires training for all staff and chauffeurs on how to mimic another company. As a trusted representative of another operator, your staff must say they work for the other company if a passenger asks. Logoed signs may be needed on iPads that imitate what a client expects to see in their hometown. Even special neckties may have to be worn as part of the uniform. These are easy to coordinate, and doing it well will ensure more business comes your way.

At the end of the ride, billing must be smooth and accurate. Floating money to an affiliate that does not pay timely is brutal, particularly for small operators who want to grow. Have the credit cards ready and pre-authorized, like for all other transactions.

Is this all too much? It can be. When farm-ins represent too large a portion of your business, profit margins will fall, so monitoring that is important. But farming out is like having independent operators without the burden of providing employment, vehicles, or fuel. All you need is the credit card to pay your affiliate and the operational integrity to deliver in your own market when it’s your turn.

Cooperative farming yields great benefits. For growth outside your home market, it is nearly indispensable. Affiliate relationships are natural symbiotic partnerships to grow your home market garden. Fertilize them with attention, operations excellence, and brand consistency, and you will reap far more than you sow.

Keywords

affiliate networks   Anne Daniells   building your clientele   farm-in   farm-out   How To   ILCT 2017   

 

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How Should I Charge Wait Time?

Time is money, more so in this business than many, as we depreciate vehicles, pay fuel for idling, and shoulder the labor costs while a passenger moseys to a vehicle. Every business must know the cost of its product or service. Wait time is part of what we must include in our cost of doing business, but only to an extent. At some point, usually at a precise moment, a customer starts paying for being late. What to charge and when came up in a recent Facebook discussion in the LIMO group.

Rebecca Schmuck with Going Green Limousine in Chicago wanted to know how others in the group handle timing and pricing for a late client.

The industry standard is generally a grace period of 15 minutes, but this is changing. Gary Cooper with Affiliate in Indianapolis summed it up nicely, describing late charges as starting after “15 minutes on all pickups except airport arrivals, 30 minutes after a flight lands, or 45 minutes after a flight lands if it’s an international flight. $1 per minute after that to one hour after pick up time, then the trip goes hourly with a two-hour minimum.” Gagan Bahad with SFO Golden Limo agrees with this fairly standard approach.

However, it may be time to reconsider and make customers pay more directly for the time they choose to take. Delayed rides can affect whole grids, making a well laid out day become an expensive one with farm-outs and lags between rides — truly a dispatcher’s worst headache. In addition, labor has increased dramatically in the last couple of years. There is much talk about reducing the allowable wait time to only 10 minutes. But many are adopting the view of Executive Limousine’s Doug Schwartz: “We handle ours a little differently. We don’t want the passengers using the 15 minutes on every trip. If they go beyond the 15 minutes, we bill from the original pick up time. On flight arrivals, we allow an hour as that is out of their control.”

And the wheels must be rolling, not loading luggage and finding the last passenger. If we are “on time,” i.e. 15 minutes early, then a grace period of 15 minutes can mean half an hour of non-billable time. Do not let clients take advantage of this. It can be a costly mistake if not charged accurately.

If wait time is a dollar per minute, at least the overhead costs get covered. Converting to hourly is part of the pricing strategy, too. Fifteen minutes may be tolerable, but after 30, it makes sense to go to your hourly minimums. That’s the service the client is really getting anyway, so don’t be afraid to charge it.

California operator Anne Daniells has more than 25 years of experience in corporate America and the limousine industry, and once owned an LCT Operator Of The Year Award-winning limousine company. She can be reached at Anne@lctmag.com.

Keywords

Anne Daniells   Ask LCT   reducing fleet idle time   time management   waiting issues   

 

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6 Ways Limo Services Fail & How To Avoid Them

It’s not true: The adage half of small businesses fail in the first two years is wrong. Only 30% fail in that short time period, but after five years, yes, it’s true. Half of new businesses are gone. So says the U.S. Departments of Commerce and Labor.

And if you read other sources like Fast Company and Bloomberg, the statistics are even more dismal. A massive leap of faith is needed to begin a new business venture.

Failure is a tough topic, but planning is critical to avoid the major pitfalls that burden any business. Planning for contingencies is important, too. So while you build processes, grow the client base, and stand out in your market, be sure to plan for the best and prepare for the worst. When a business closes its doors early in its life cycle, it is usually not due to a happy owner who has made too much money and wants to retire. No, it’s sad, ugly, and painful, and worth avoiding.

Established companies are not immune to failure, either. For the larger ones with years of experience, it is often an inability to change direction, to flex when the market demands it, or to keep sharp when competition changes. Still, getting to be one of the “old guard” is not easy.

In the tradition of the “6 Common Failures” format familiar in business media, here are six major pitfalls in the limousine industry to avoid for future success.

#1: Starting Your Company for the Wrong Reasons
We all want to make money. And maybe your think striking out on your own will allow more flexibility. Perhaps you want to build something for your children to take over. These benefits may come to pass, but they do not make a business succeed on its own. Business starters often get frustrated at not having these things happen quickly.

What are the right reasons? First, you must firmly believe and know, from research and experience, you have a solution to a market need. You must love this 24/7 industry and the business so you will be determined to get through the inevitable obstacles. You must have a passion for the people around you, often family, who will help to make or break you. And they need to feel the same way. You must also have the ability to survive the rough patches. Remember, you have lots of metal on the ground rolling at all hours of day and night. You will inevitably encounter problems on the fly. Paint a clear picture of your goal and be sure the same philosophy is shared by others vested in the business.

#2: Not Enough Capital & Financial Know-How
Business owners, especially new ones, often underestimate how much money is needed to operate. Pie-in-the-sky projections coupled with insufficient capital resources will kill an operator fast. Planning for business needs and having extra money for unexpected events is especially important in the first few years. You’ll also need money and capital to either buy or lease expensive luxury vehicles.

What to do? Use someone smarter than you to help with financial planning. A personal banker, small business coach, or seasoned limo operator good with numbers often works at no cost. Each could help determine what your operation needs to start and stay in business. Companies face so many risks with labor issues, lawsuits, sudden events like illnesses, and market shifts that you must understand everything that may be needed in the early stages, and amid challenges. Even for established operators, access to capital is essential for growth, reinvestment, and financial safety. Flexibility and access will be important for many years — that is, if you survive the first few.

#3: You’re Not The Best Manager
We have to look in the mirror on this one. It may be one of the reasons you are struggling. This may actually be the top reason operators fail. This industry has very few barriers to entry — a simple driver’s license may have gotten you started as a chauffeur, but new owners may lack relevant business and management expertise in areas such as finance, operational procedures, fleet and safety concerns, and managing employees.

How to learn to lead when you’re already the leader: Recognize where you can grow. Seek out mentors and operator groups for guidance. Stay educated and constantly review your operational numbers and data. This can never end, no matter how comfortable you are with the business. A successful manager also creates a creative and productive working environment. Forunately, LCT offers two annual trade shows where you can gain this invaluable experience.

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#4: Lack of Planning
Many organizations do not spend enough time planning before changing. Likewise, new operators may not plan correctly, either. Planning for growth, for the unexpected, and for the actual business are the three essentials. How can you ever get from Point A to Point B without a business plan, just like two addresses for a pick up and drop off? A night on the town, an event, and a business all need a plan. Most unnerving are the unexpected curveballs in a heavily regulated industry with labor and insurance needs.

What to plan for: First, a business must have a realistic plan based on reliable data to create reasonable and measurable goals. A thorough business plan describes the operation’s vision and goals. It evaluates the competition and considers potential problems and solutions. It develops a solid financial plan with accurate and educated forecasts for revenue, fleet, workforce needs, and other operating expenses. And it coordinates sales and marketing to meet the company’s goals.

#5: Forgetting Your Customers
Your operation will not thrive if you don’t know what your clients expect. Are you listening to them? Is revenue declining? Are you aware of service issues? Maybe something has slipped by, but you have no way to know. In the limousine business, it’s all about experiences you create, and a focus on details.

How to avoid losing touch: Use surveys after rides to collect data. Make random quality calls to clients to stay in touch. Send a simple birthday, anniversary, or congratulatory wish. Personal relationships have always been more important than perfect service, and a friendly approach with clients will keep them loyal when the unfortunate service issue occurs. Keep a database record of client likes, dislikes, tastes, favorites, habits, etc., and then adjust your service repertoire accordingly.

#6: Growing Too Fast
A successful business can lead to blissful, prosperous fates, but unmanaged growth is a leading cause of business disarray while even rapid planned expansion can lead to bankruptcy. You don’t want to stifle growth, but be careful what you ask for. Too much too soon can be very destructive and costly. In the chauffeured world, starting out with one or a handful of vehicles while adding slowly overtime has worked well for thousands of operators.

How to avoid growth problems: Just like daily operations, growth and expansion take careful planning. So before you expand the fleet, you must know you already have the revenue to fully pay for each new vehicle. Breaking out each vehicle as its own P&L unit helps you keep better tabs on day-to-day finances while guarding against long-term surprises.

LCT has a vehicle cost calculator here

If you think a new client contract sounds good, confirm it with a thorough analysis. For example, a hotel contract may mean extra labor for standby cars. Or a corporate client may demand very low prices that don’t make sense. Use those experts surrounding you to analyze the best way scale your growth. Whenever doing RFPs, spend the time gathering as much information about the prospective client company as possible, and never overstate or overpromise what you can deliver. The loss of a valued client supplying a good chunk of your revenue can send your operations reeling.

Our industry has many natural challenges, but we create many of them. By recognizing the mostly likely problems, such hardships will have little effect. With proper foresight, the biggest hurdles will seem smaller.

Keywords

business growth   business management   entrepreneurship   finance   Management   operator finance   startup   

 

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What Do You Look For In A Sedan?

With show season ramping up and year-end fleet changes in the works, LCT Magazine readers will flock to shows in Atlantic City and Las Vegas, checking out the latest vehicle models. The LCT shows have proven to be the perfect location to see the most chauffeured vehicles and buses on the market, even if some prototypes are not fully up to livery spec.

With so many choices, we asked our LCT Facebook readers for ideas on the best sedan features for operators looking to buy, but unsure where to start.

It certainly must make financial sense for operators to buy a particular vehicle, but price and operating costs are not the only considerations. If most of your work is affiliate-related, you may be expected to run certain vehicles. And if you have clients who demand BMWs, then you need to provide what your market demands.

For many, BMWs and special vehicles are the right choice. But others see the more common Lincoln and Chrysler models as more appropriate for their business models.

Dan Goff with A Goff Limousine and Bus in Charlottesville, Va., has strong ideas on how operators should review their sedans. The choice is based on many factors specific to the livery industry. What details does Goff consider influential?

From an operational standpoint, the manufacturer’s “mechanical history, vehicle appearance, and recommended fuel type” affect costs. And we all know the passenger experience is the golden draw to using a chauffeured vehicle. The back seat area has important options to consider, including “legroom, reclining seatbacks, heated and cooled seats, USB and charging options, and rear controls for climate control and maybe even entertainment systems.” 

Finally, Goff suggests, evaluate the chauffeur’s interface with the vehicle. Buyers should definitely consider helpful features such as “hands-free trunk releases, navigation systems, and safety controls” that assist driving and prevent accidents.

Nicholas Kokas of Brentwood’s Distinguished Executive Transportation in Michigan also gives his own “hats off” to the latest-model sedans. They are designed well for the chauffeured car market, “focusing more on rear seat comfort features.” Most are good economic choices for standard markets, and “transportation companies interested in creating higher profit margins” have some excellent choices, Kokas adds.

Thank you, gentlemen, for your insights. See you on the show floor.

And if any of you have industry related questions or answers, please email me at the address below. If I don’t have the answer, we’ll find people who do.

California operator Anne Daniells has more than 25 years of experience in corporate America and the limousine industry, and once owned an LCT Operator Of The Year Award-winning company. She can be reached at Anne@lctmag.com.

Keywords

Anne Daniells   Ask LCT   Fleet Vehicles   long wheelbase sedans   midsize sedans   new sedans   new vehicles   onboard amenities   premium luxury sedans   sedans   vehicle technology   

 

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When Did Operators Become IT Guys?

My computer just crashed,” whines a frustrated dispatcher just as a customer calls asking why she received multiple confirmations for the same ride. “Do they have changes on them?” she queries. “And why did my card get pre-authorized three times?”

As transportation depends increasingly on technology to provide fast and accurate service, companies must spend more time making sure the technology works right at all times. It’s critical to running a smooth operation and keeping clients happy. System failures and computer issues are a daily concern. When they affect customers, running an operation is no longer just about driving passengers to their destinations.
Operators maintain highly sensitive databases with credit cards. Payroll compliance is its own specialty, especially in labor-friendly states. And a few phone glitches can undercut an operator’s slim margin in just a day or two. Earlier in this decade, some operators were still taking reservations by hand. Now you must decide how to manage and incorporate all your in-house technology issues. “When did I become an IT guy?” wonders this same operator now.

System Runners
With multiple interconnected systems to manage, coordinating them well is easily a full-time job. Reservation software, computer systems, website monitoring, dispatching, vehicle tracking, billing, emails, texts and tablets all can get complicated. Then add credit card processing, accounting, and payroll integration. Even phone lines typically run over Internet IP lines. Any part of the system can undermine the simple business purpose of providing high-quality chauffeured transportation, not to mention hurting productivity and morale.
Maybe it’s time to let this responsibility go. As an owner, it may be hard to lose control, but safety and tech expertise will improve your sleep quotient. Too often, an operator spends too much time on system infrastructure and strays away from the original service plan — to provide top-notch luxury transportation.
Service always matters, so focus on core competencies to ensure an excellent experience for clients. However, someone still has to run the tech side of things, and who will that be when the owner gets back to transportation basics? It requires more than answering occasional request for IT help. Equipment and application management eat up more time and costs. Deciding how to handle it varies for each operator and is usually based on company size.

So what is the best way to manage systems, data and the 24/7/365 demands of technology in this industry? It depends on what you have and need, and it’s really a decision about insourcing versus outsourcing.

In Or Out?
If you are big enough to host your environment, then you need the expertise in-house to manage the infrastructure. This includes servers, racks, power management, desktop maintenance and support. Integration is demanding. Most operators do not like IT management, and few want to be on-call 24 hours a day for IT issues even if they have the know-how. Large companies require a dedicated expert-in-residence with several layers of personnel to manage IT.

For large operations, which are few, a chief information officer (CIO) will work with owners or shareholders to plan for revenue goals related to technology. This top person can see the business needs and the way to achieve them. The position combines business savvy with technological prowess. Below the CIO lurks the technological wizard who creates the needed systems. Often called a chief technology officer (CTO), this person will build the tools. By streamlining and incorporating the products to serve clients and the company, the CTO solves the puzzle with technology to make the company’s vision a reality. These are expensive employees with specific skills and influence on a company’s success.

If your company is not big enough to require a server, then you must outsource and rely upon third parties instead of hiring the expertise. Each option has its pros and cons. Assess your needs, resources, and skills, and then consider the best way to fulfill IT needs outside the company.

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In-House Hassles
In-house IT management can be fraught with challenges and expense, so first recognize you are a chauffeured transportation provider. You are not a technology company no matter how advanced your software and equipment.
Service must always be paramount, so focus on what is most important: rides and chauffeurs who provide the client’s experience. Owning IT and maintaining it internally might appear to be a less expensive route at first, but it is fraught with distractions, disruptions, and other risks that generate more costs, lose money, or both. For a small operator with slim margins and a hands-on role in the company, the highest use of time should be in finding and keeping customers with excellent service, not fixing printer malfunctions and accounting formulas.

If you pay a salary to a CIO or CTO, transaction costs are lower in that “help desk” requests can be handled in house. Certainly, service costs can be reduced if the CIO actually does the work, but a true CIO probably needs staff, at additional cost. Plus, the added expense and rising cost of hiring hinders most small- to medium-fleet operators.

Sudden Dramas
Add the list of things beyond control. You’ve experienced or heard the stories of water damage and power outages or system failures that cause missed pick-ups and lost customers. If you decide to maintain things internally, an IT person, a CTO or a CIO must fully understand the hardware, the software, and the business needs. This person or staff would develop redundancies and back-up plans. But hot sites, a secondary back-up, are expensive and the investment is often too big for the size of most operations. Capital costs go up to build the infrastructure, maintain it, and stay current. And it will be too much for one person or two to oversee day and night.

Unpredictability is the only certainty, so you must manage risks. When something goes wrong, and the phones go down, you more likely will have better access and response from a contracted agent than from internal IT staff. Most operations are simply too small to do a good job of IT in-house. There’s not enough knowledge and money to maintain a secure system. For most, an outside specialist offers distinct advantages.

Outside Benefits
Managed services offer more professionalism and core expertise than a single IT employee can offer individually. For a fee, a contracted service will provide immediate response when needed while offering state-of-the art hardware and redundancies to protect your data and sensitive information. They also take on the capital risk of being able to provide the services, stay current on technology, and maintain industry compliance and data security. Just the cost of losing data is enough to seriously consider having someone else monitor your system operations.

An external, managed environment is the way to go for most operators. A vendor who provides the service is the expert, after all. This results in higher compliance levels and multiple back-ups for your business. Safety and security is better and your contractor will stay on top of evolving technology so you can avoid shopping for updated hardware or more user licenses for outdated software.

Unless you are a large operator, stay tuned into what you do best. Grow your business, deliver unblemished service, and maintain stable data with the help of an outside expert. Your employees will appreciate it, and you’ll sleep better, too.

Keywords

business management   executive changes   Information Technology   staff management   

 

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How To Check Up On Your Affiliates

There are few perks to owning a limousine company. Let’s agree it is a brutal way to make a living. Somehow weekends and holidays blur into “regular work hours.” Not much time off.

Even when a well-deserved vacation or trip finally makes it to the calendar, work encroaches. Getting away from a phone and computer is near impossible. If your spouse complains a solo vacation would be easier without the kids to watch while you work in the hotel room, you understand we never truly “vacate.”

One of the little perks of owning a limo company is the ease of having a chauffeured car whisk you to your hotel-office. Eager affiliates are ready to take care of you in exchange for more business. A comfortable ride for the price of a cash tip is often much appreciated.

Good Grooming

If you’ve spent long nights at industry trade shows grooming your affiliate network, you know the drudgery involved. The upside is the higher profit margin, so those relationships built in Vegas and other cities around the country are important. Sure, you know the person says, “We can do your work,” or “Of course, we can provide the vehicles you want,” but how many small- to medium-sized operators can afford to see an affiliate’s fleet in another market?

Anuj Patel, one of our LCT media advisors with Pontarelli Worldwide in Chicago, suggests several tactics for monitoring affiliates. “Become friends with them. Call them often. Ask lots of questions. Ask for photos of the fleet. Ask about their future plans and vision.”

Patel stresses the value of building business relationships as often as you can, and local affiliates are no exception. “Go see the local affiliates at least once a quarter and take them out to lunch. Developing a personal relationship with affiliates is really the best way to monitor them. Build that trust through friendship, and they will not let you down and actually prioritize you. Your affiliate manager should spend much of the day making calls just to say hi and ‘shoot the breeze.’ It’s a sales position. Many people forget or don’t see it that way, but frankly, that’s what it is.”

Travel Smart

For smaller operators, the affiliate manager is also the owner, and making calls and developing relationships takes time. For those operators who wear many hats, use your rare business and personal trips to maintain your company’s brand. When traveling out of your home city, don’t waste a great opportunity; evaluate your affiliates instead. Instead of taking advantage of a free ride, pay for it (a business expense, after all), but make the ride work for you by experiencing your company’s representatives.

For five years, I hardly took a tripwhere I didn’t secret-shop my affiliates. Of course, it wasn’t my name on the manifest, and only once did the chauffeur recognize me (in that case, it was the owner filling in). It works beautifully because chauffeurs have no idea who you are. Without paying a secret shopper, you see firsthand how an affiliate treats an unknown passenger in its market. And if you care about your clients, you must know how they experience your service no matter where.

Each time, I’d say slink into the back seat, mention an administrative assistant made the reservation, and ask what company they worked for. Fortunately for them, they nearly always represented my company correctly. Once or twice, they looked at their trip details to confirm, but the chauffeur knew never to state their company. Clearly, those affiliates were training well.

Rating Service

I have to say — most affiliates met our expectations. The one that sticks out in my mind provided the best service of all. The car was immaculate. A newspaper and water were not only waiting but intentionally offered. Mints were available, and the chauffeur asked me about the radio and temperature. He handled the driving and luggage like an expert.  

The hitch was the chauffer’s attire. While it may not have warranted a complaint from a client because the service was perfect, I was stunned to see the chauffeur greet us in mismatched pants and sport coat — with elbow patches. He looked like a college professor working for Uber. Most tacky were the brown shoes with white sport socks. I couldn’t help but take a photo as he moved the luggage from the truck to the curb.

Did no one see him that morning? Surely, dispatch would have said something. Was he colorblind? Even so, white socks are hard to confuse. It made no sense.

When doing farm-in work, C-suite executives expect the same look. Uniforms create consistency for passengers and confidence your operation is the same no matter where they travel. It reinforces loyalty to you and your brand, and affiliates must replicate your service. If that means changing ties and removing any branded items in the car, then that must be done to be your affiliate. They are your operation in another city.

So shop around, take some photos, talk to your affiliates graciously after each ride — but let them know white socks don’t cut it, and black suits matter. 

California operator Anne Daniells has more than 25 years of experience in corporate America and the limousine industry, and once owned an LCT Operator Of The Year Award-winning limousine company. She can be reached at Anne@lctmag.com.

Keywords

affiliate networks   Anne Daniells   Ask LCT   chauffeur behavior   customer service   farm-in   farm-out   

 

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