Luxury Coach & Transportation

February 2014

Magazine for the professional limousine, charter and tour industry.

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56 LIMOUSINE, CHARTER & TOUR FEBRUARY 2014 WWW.LCTMAG.COM LCT SHOW EAST SESSION SERIES: FINANCE Goals, prof ts, costs, prices and benchmarks all must be connected and analyzed to make the most money possible. By Linda Jagiela, LCT contributing writer A TLANTIC CITY, N.J. — Busi- ness owners everywhere want to know the answer to the question: How do I make more money? Let's face it, unless you run a charity, you're in business to make money. So how do you make more money? Tim Rose, owner of Flyte Tyme Worldwide Transportation in Mahwah, N.J., and Chris Wolf ngton, owner of City Car Services, which owns TOC Chauffeured Transportation in Cherry Hill and Trenton, N.J., and Carey of Houston, helped opera- tors at LCT Show East in Atlantic City navi- gate their way to a better bottom line. Goal setting needs to be the starting point for operators. Create a mission and def ne the culture of your company. As part of that, business owners need to make prof ts an integral part. "Prof tability helps everyone," Wolf- ington said. "It allows you the ability to give raises and buy equipment. Everyone wants to be prof table. It should be part of your corporate culture." Metrics For Prof ts Rose recommends developing metrics to measure prof tabil- ity. "If you don't have metrics, you are not using your dispatching software to the fullest," Rose said. "At an executive level, we know that it is important to spend the time looking at the reports and making a plan of action." He encouraged operators to work with their f nancial people to look at the spreadsheets and understand what is happening. "If you don't have a CFO, there are companies out there that let you rent a CFO for the day. These folks are experts and can help you learn how to put together the metrics and the benchmarking for all of your costs." Wolf ngton encouraged the audience to understand their costs. "If you are not optimizing your f eet, this is a huge area where you can help your prof tability. Do you have the right quantity of vehi- cles and the right mix?" he asked. "On any given day, look at your as- sets," Rose said. "Lincoln Town Cars could be purchased for $12,000; now they are $40,000 for a smaller vehicle. The cost of vehicles has gone up dra- matically but our pricing hasn't." Developing local farm out partners to assist during peak times was important to both owners. They encouraged good, healthy relationships with farm out part- ners. "If you build your f eet for your peak times, you are building a church for Easter Sunday," Wolf ngton said. "Your f eet must support your infra- structure," Rose added. "Don't delete your f eet metrics by farm outs." Cost Reviews Rose suggests looking at your biggest costs f rst. "Look at payroll, for example. You need to understand what is involved in your payroll. In Los Angeles, for exam- ple, overtime costs can be signif cant. You may want to hire three shifts of drivers to alleviate the need for overtime. You may want to move your off ce to a more cen- tralized location," he added. "An L Series Town Car was $4,000 more to purchase. Do you really need it? Look at what your competition is doing. We added Chrysler 300s and had great success with them." Wolf ngton disagreed. "We make con- scientious choices to incur costs that will make the customer experience better. It is a philosophical choice but this is how we can differentiate ourselves. We put Wi-Fi in our cars to do this also. We make an investment that is strategically motivated. You may not be able to prove it up front. Some choices are just not cut and dry." Both laughed when the word "drasti- cally" was discussed. "There is no silver bullet," Wolf ngton said. "You just need to Flyte Tyme CEO Tim Rose advised operators during a session at LCT Show East to have accurate metrics that measure prof tability. How To Drastically Increase Your Bottom Line FOR MORE INFO Tim Rose recommended operators read: From Worst to First: Behind the Scenes of Continental's Remarkable Comeback, By Gordon Bethune, 1999. This book gives a blueprint of how Continental Airlines was turned around from the worst airline facing bankruptcy to a world class service provider at the time. k s r a- r a - t e FO Ti m o p F B o R C ho w Co nt in en ta L I M O _ 0 2 1 4 b o t t o m . i n d d 5 6 LIMO_0214bottom.indd 56 1 / 2 1 / 1 4 1 1 : 5 5 A M 1/21/14 11:55 AM

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