Limousine Charter & Tour

December 2016

Magazine for the professional limousine, charter and tour industry.

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42 LIMOUSINE, CHARTER & TOUR DECEMBER 2016 WWW.LCTMAG.COM OPERATIONS Ready For Affiliate Work: Are You In or Out? Building mutual revenue is a matter of knowing how to compete and when to cooperate with companies looking for the same thing. By Anne R. Daniells, LCT contributing writer A simple veggie plot in the back- yard churned out organic sur- prises now gracing the shelves in cans of jam and tomato sauce for winter. The cultiva- tion of these farm goodies cre- ate sustenance no matter the season. The simple farming we do amid the soil brings growth and bounty — farm- ing 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 suc- cessful 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 de- ciding 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 de- sire: To grow revenue and profits, increase use of resources, and create relationships. This industry is one of a few that de- pends 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 sim- ply 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 some- one 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 com- petitors close and work together. On the flip side, local farmed-in rides are often not very profitable, but any lo- cal 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. 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

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