Luxury Coach & Transportation

July 2018

Magazine for the professional limousine, charter and tour industry.

Issue link:

Contents of this Issue


Page 42 of 76

40 WWW.LCTMAG.COM The True Cost Of Running A Bus Understanding fixed and variable cost is key to deciding whether or not buying a motorcoach will bring you profits or headaches . By Tom Holden wning and operating a bus can be the most profitable or costly endeavor for your company. It can take you into the next decade, or put you out of business. I don't want to scare you…well ac- tually, I do. I want you to think about everything you will read in this article before you decide to jump into this ve- hicle segment. You live and learn, but only if you can afford to lose first. You have listened to many educa- tional seminars and webinars on buy- ing your first bus. New or used is al- ways the question. No one can answer that but you. You need to understand your market and have a real knowledge of your finances. So many companies don't even know their numbers until tax time. at's too late. A great operator understands their profits and losses on a monthly basis. ey have a close connection with the bean counters: Your company accountant or CPA. You should meet with your CPA every few months and do a recap of your P&Ls. So many companies are losing money in one de- partment and don't even know it. Maybe they have a large cash flow, but when that cash flow stops, they don't have as much as they thought. So many people only think "can I afford the payment?" You need to gross at least $200,000 per year for a used motorcoach and higher for a new one. Do you have enough business com- ing in now for that bus? Have you been farming that amount out to the local bus company? If not, you're NOT ready to buy that bus. If you already have buses and are thinking about new business, something like con- tract shuttle work, the same thought process must take place. LUXURY COACH & TRANSPORTATION JULY 2018 MOTORCOACHES / FINANCE

Articles in this issue

Links on this page

Archives of this issue

view archives of Luxury Coach & Transportation - July 2018