Luxury Coach & Transportation

July 2018

Magazine for the professional limousine, charter and tour industry.

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Page 43 of 76

LUXURY COACH & TRANSPORTATION JULY 2018 41 not added in the quote), the list goes on. You will not hit your net profit all of the time. You can add a lot of profit or you can lose your savings. It's up to you to figure out which path is best for your company. e attached side boxes are an example of fixed cost and variable cost; you must understand both. e question is not, "Can I afford the monthly payment?" It's "What is my yard cost?" is is the fixed cost — the cost of a bus before you even start the engine. Usage is another important number. How many days in a month and year will that bus move? In the motorcoach in- dustry, there needs to be a usage rate of at least 58% for the year. You will be higher in some months and lower in others, but shoot for 60% and you'll be fine. Same goes for adding the second bus and so on. If you look at the sidebox for fixed cost, you'll see there are many line items. You've got to calculate all of those line items because that's what it costs to own a bus. Now add on your variable cost. Total them both together. Add in the expected net profit you intend to make: 10%, 15%, 20%, 25%...pick the number that works for you and your cli- ents. Remember, you need to make as high of profit as pos- sible during your busy months. ink about the hotels in your area. ey have surge prices when a special event is going on. Even if you charge the 20% net profit line, chances are some- thing might go wrong. A mechanical problem, traffic, an unex- pected stop, needing to add in a last-minute relay (which was 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. That's too late. EXAMPLES OF FIXED COSTS • CSR Dept. • Dispatch Dept. • Fleet Dept. • Mechanics • Porters • Motorcoach Dept. • Safety Dept. • Accounting Dept. • Human Resources • Management • Officers • Overtime • Taxes • Wages • Commission • Vehicle Refurbishing • Parking Lot Rent • Vehicle GPS Fees • Vehicle Insurance • Vehicle License Tags • Vehicle Taxes • Vehicle Depreciation • Vehicle Loan Interest • Radio/Cell Expense • Advertising • Amortization of Goodwill • Auto Expense • Bank Charges • Compliance & Preemployment Fees • Computer Supplies & Expense • IT Maintenance • Consulting • Contributions • Depreciation Expense • Dues & Subscriptions • Freight • Gifts • Insurance: (General, Key Man, Officer's life) • Workers Comp. • Utility Vehicle • Interest Expense • Leased Office Equip. • License & Permits • Meetings & Educational Exp. • Merchant Fees • Professional Fees • Payroll Service Fees • Accounting Fees • Legal Fees • Rent & Lease • Other Repairs & Maintenance • Property Tax • Telephone Expense • Mobile Phone Expense • Cleaning Supplies • TV/Cable • Utilities • Uniforms & Laundry • Travel Expense TOM HOLDEN is the GM/operations manager of Rose Chauffeured Transportation in Charlotte, N.C. He can be reached at

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