Luxury Coach & Transportation

November 2018

Magazine for the professional limousine, charter and tour industry.

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LUXURY COACH & TRANSPORTATION NOVEMBER 2018 29 Usage You cannot control usage, also known as utilization, and it has a big impact on your ROI. Usage is the quality of being able to be used or obtained. In the bus world, usage should be at least 58%, and the higher the better. But what happens during a slow season? Cancellations, holidays, unexpected event date changes, and most importantly. . . Driver Availability You may own the bus, but if you don't have a driver for that requested date, you are "S.O.L." and your ROI will decline. So what do you do to ensure your ROI will hopefully maintain a double figure profit? ink outside of the box…..First follow the link here; https://youtu.be/o8ixDouvVjU to watch a webinar I just hosted with LCT associate editor Lexi Tucker titled "Matching Minibuses and Motorcoaches to Client Types." In Slide No. 4, "Who are you driving?" will give you some out of the box ideas you may have not thought about. When you get a contract, you need to understand what vehicle you will be using. Long-term contracts for shuttle work do NOT need all of the horns and whistles. Your pricing "income" will be lower, and you need to maintain lower cost "expense." Here are some areas to consider to keep your buses moving: Corporate transfers, corporate shuttles, groups, churches, elementary, middle, and high schools, private school bus routes, universities, casinos, traveling sports teams, weddings, evacuations, tour guides, Department of Defense/ military, holiday and Christmas tours and events, and employee shuttles from remote parking lots or decks. So remember: Match your buses to your client types, and as you add to your fleet, be sure you keep matching up with the appropriate vehicle. You may or may not need all of the horns and whistles a traditional limo company is used to. Why pay extra to own a black bus if it's really not what your client needs? Remember, it's mostly about your ROI. — tom@tomholden.com consultancy, uses 10% ROI as a break-even point, which is what you could get by just leaving money in the stock market. at's from an investment standpoint. 21% is considered excellent, 11.4% is above break even, and 10% is considered profitable. In addition to that awful word "expense," comes. . . ILLUSTRATION: KEVIN HAEGELE, LCT ART DIRECTOR Two Examples: A) New 2018 36-passenger deluxe minibus purchased in March 2018 and placed in service in April 2018. Annualized ROI Net Income = $38,292 20.66% Cost of Investment = $185,380 B) Slightly pre-owned 2017 56-passenger motorcoach placed in service Jan. 1, 2018 Annualized ROI Net Income = $54,240 11.43% Cost of Investment = $474,500

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