Luxury Coach & Transportation

March 2016

Magazine for the professional limousine, charter and tour industry.

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Page 48 of 90

FINANCE How To To Increase Your Bottom Line From insurance, to technology, to fuel costs, three expert operators offer tips to keep more money in your pocket. By Tom Halligan, LCT East Coast editor I n an industry where proft margins for most operators are often thin, controlling costs should be a priority in keeping as much of what you earn as possible. "I'd venture to say that if you were to get 100 limo operators in a room — from the new guy with one vehicle to the opera- tor who runs a nice com- pany for the past 30 years — I'd bet only 10% would know their true cost for their base airport runs, and sadly, fewer than that would know how to fnd out," said Steve Qua, owner of Company Car and Limousine in Cleve- land, Ohio. Qua spoke at a panel discussion, "Cost Cutting Ideas to Increase Your Bottom Line," held Nov. 9, 2015 at the an- nual LCT-NLA East Show in Atlantic City. Qua, along with fel- low panelists Matt As- solin, vice president of Nikko's Worldwide Chauffeured Services in Houston and Aus- tin, Texas, and Michael Callahan, president/ CEO of Able Lim- ousine in Hop- kinton, Mass., shared a w i d e array of proven cost-cutting tips and strategies operators of all feet sizes can use without sacrifcing service quality. The panel offered practical cost-saving advice on a vari- ety of operations expenses, including fnancial manage- ment, insurance, fuel, technol- ogy, vehicles/maintenance, and vendor management. Financial Management "I think a lot of operators, es- pecially those without CFOs or fnancial staff, really don't know if their fat rate from point A to point B is proft- able, not proftable, or break even, if they are not consider- ing all of the fxed and ancil- lary costs associated with that ride," Qua said. With 20 years industry experience, Qua explained that "some people don't re- ally understand what it takes to rebuild income you spent somewhere else in the wrong way. They don't understand the relationship between the dollars going out the door and the effort necessary to re- build that income. Qua uses a simple rule to help maximize his spend- ing in relation to his known fxed/variable costs and proft margin. "If your mar- gin is 10%, for every $100 of spend you do not need, you need to sell $1,000 of service to recoup the lost revenue." LIMOUSINE, CHARTER & TOUR MARCH 2016 44 WWW.LCTMAG.COM PHOTO/ILLUSTRATION: KEVIN HAEGELE, LCT ART DIRECTOR

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