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ATLANTIC CITY, N.J. — Business 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 Wolfington, owner of City Car Services, which owns TOC Chauffeured Transportation in Cherry Hill and Trenton, N.J., and Carey of Houston, helped operators at LCT Show East in Atlantic City navigate their way to a better bottom line.
Goal setting needs to be the starting point for operators. Create a mission and define the culture of your company. As part of that, business owners need to make profits an integral part.
“Profitability helps everyone,” Wolfington said. “It allows you the ability to give raises and buy equipment. Everyone wants to be profitable. It should be part of your corporate culture.”
Metrics For Profits
Rose recommends developing metrics to measure profitability. “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 financial 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.”
Wolfington encouraged the audience to understand their costs. “If you are not optimizing your fleet, this is a huge area where you can help your profitability. Do you have the right quantity of vehicles and the right mix?” he asked.
“On any given day, look at your assets,” 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 dramatically 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 partners. “If you build your fleet for your peak times, you are building a church for Easter Sunday,” Wolfington said.
“Your fleet must support your infrastructure,” Rose added. “Don’t delete your fleet metrics by farm outs.”
Rose suggests looking at your biggest costs first. “Look at payroll, for example. You need to understand what is involved in your payroll. In Los Angeles, for example, overtime costs can be significant. You may want to hire three shifts of drivers to alleviate the need for overtime. You may want to move your office to a more centralized 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.”