LCT recently asked the owners of three successful small limousine companies to sit together and talk about some of their concerns and to share some of the solutions they have found to common problems.
In addition to running their own companies, each also serve as president of their local limousine association. Here’s what they had to say:
Q: Share one important secret about how you, as a small operator, are getting your name out on the street and getting more business.
Sharon Brown, B&R Limo, Capitol Heights, MD
# of vehicles: 5
President, the Association of Limousine Operators in Maryland
We have found that word of mouth works better than anything – it’s the best advertising and it’s free.
We’ve also found that it’s important to keep our cars out the street. We can’t say that we have a personal car so when we ride around in the Suburban or the Rolls Royce or whatever, that’s our advertising. People come up to us and want to know about the car.
So we talk to them, tell them what we do and hand out our business cards. There’s no place we don’t go where we’re not handing out our business card, the grocery story, movie house; we’re always selling.
We also advertise in wedding magazines because that draws brides.
Stafford: I’ve been focusing on the wine industry in Virginia. There are currently 87 wineries and they are projecting 200 in the next five years. Wine tours are not just for Californians.
We do an eight- or 10-hour excursion on Sundays, when most other operators’ cars are just sitting around.
I also want all my competitors in the area to advertise because the more they put it out there and the more the consumer hears about it, it makes a bigger pie for all of us. That’s the way to grow the business, rather than when everybody tries to do airport business and ends up cutting each other’s throats.
Verbiar: The first secret I can share is a niche in the wedding business. Don’t try to muscle your way into a big catering facility that has a limousine business that they’ve been dealing with for years. You’re really not going to get in there unless they’ve been having problems. Instead, I work with local hotels that have a small catering area and do small weddings, say 75 people or so. I work with the hotel, a photographer and a videographer and we put together a package. We provide one limo for three hours, the photographer, videographer, everything.
We get our check two weeks before the event directly from the hotel. I did 22 or 23 weddings like this last season and already have five booked for next year. It’s very good business. I also work with the doctors and nurses at the maternity hospital on a stork service, bringing the new mother and baby home. It’s a perfect thing to fill dead time in the mornings. I charge $150. The car picks up the father at home, takes him to the hospital, picks up the mother and the baby and takes them back home. It’s generally under two hours of work. Not only do we provide the one car for the package, but many times they’re booking a second car for the family.
Q. How do you, as a smaller operator, compete against larger companies?
Glenn Stafford, Love Limousine, Richmond, VA
# of vehicles: 6
President, the Virginia Limousine Association
I don’t, I want to work with the Dav Els, the Empires and the Careys. Our vehicles don’t have our names on them anywhere, they look like private cars. I can be you for this job and someone else for that job. If I can get the New York rate and everyone else is worrying about the Richmond rate, that’s fine by me.
Also, working with these big companies is really an opportunity to learn the proper procedures on how to do things. They’ve all been there, done that, made the mistakes, figured it out. So I’m going to learn all I can from them. And that raises the bar for me and maybe everyone else. And I try to not compete a lot for local business. I work at figuring out ways to market my own thing, like the wine tours or funeral work.
Verbiar: I don’t compete with the big companies because in my area they are airport services and I will not get into a price war. People call and say how come they’re so much cheaper than you. I say try us and you’ll find out why. You get personalized attention from us, the best service. We’ll be there when we say we’ll be there. The client comes down the escalator at the airport he’ll see our sign; we guarantee it.
Brown: We do more weddings and jobs like that and the big companies are more corporate. But we do try to build relationships with the big companies, let them know who we are, let them see how good our cars look, how good our service is, what we can do, how we’re going to represent them.
I think it’s also really important to get involved in the industry, to attend local association meetings, to come to the big shows. You get to meet people that you might want to do business with, especially at the big shows where all the big operators show up. By being there, by putting yourself out, by learning and listening, it tells people that you are serious about what you do, that you are someone they might want to work with.
Q: What’s the single biggest threat to your company and why?
Gerard Verbiar, Majestic Limousine, Shrley, NY
# of vehicles: 5
President, the Long Island Limousine Association
Too much regulation. There isn’t a statewide body [in New York] for regulating limousine companies. It’s controlled by local municipalities and right now we’re’ going through range wars. One town won’t let us cross its borders without a tag. One county wants us to do this. It’s getting absurd. I’m drafting a letter to [New York Gov. George Pataki] to say that someone needs to step in or it’s all going to fall apart. It used to be just the counties that were regulating us, but now our local town is establishing a taxi and limousine commission. It’s just too much.
Brown: [The regulators] don’t have a clue on when and how to manage our industry. They regulate the taxicabs and they’re on top of that. But [limousine companies] want to separate ourselves from them.
We also have the issue of Virginia, Maryland and Washington – all of them telling you where you can go and what you can’t do. It’s just ridiculous. Someone has to step up to the plate and make a decision on what we’re able to legally do instead of having all these decals and permits and rules and regulations.
Stafford: The biggest threats to my business are cash flow and insurance. I have to pay my chauffeurs pretty quick but then I’ve done some farm-out work for [large operators] who don’t pay me for 90 days. And the cost of insurance is absolutely bananas. But you have to pay for it and I don’t see any way to get around it.
Verbiar: I had a similar problem with operators that farm business to us so I changed my invoices to include a finance charge. If they don’t pay with 30 days there’s going to be an extra 3.5%. They didn’t believe me until the next time the statement went out and I had added it to the amount they owned me. I got a phone call. “How come it’s higher?” they asked me. I said, “Look at the invoice.” It hasn’t totally eliminated late payments but it’s helped.
Q: As a business owner who wears many hats every day, which part of your business takes up the most time and why?
Verbiar: Crisis management – every single day there’s something that takes you away from what you planned to do. It could be something like the driver coming back and saying the brakes are grinding. So you got to take care of that. You wear all the hats. Fortunately, my wife handles all the phone work. But that means I take care of the cars.
Q: Do you want to be one of the big limousine companies?
Brown: It depends on what big is. If big means having hundreds of cars. No, I don’t want to be that. But if big means that people know who you are and respect you, yes, I want to be that.
Stafford: I want to be a representative of every big guy. I want every big guy, when he thinks of Central Virginia, to call me. The big guys have the best clients – they get the most money – and I want them to think of me first when they need something in my area.
I also want to be effective in the legislative area; I want to make a difference and to improve the business and regulatory environment for everyone in my area.
Verbiar: I have a tough time trying to answer that. I don’t know if I want to be any bigger but I want to be more profitable. We started as an airport service and then moved into weddings and prom business, which I really love, because that, to me, is where the money is.
And we’ve bought up a number of other businesses over the years, not so much to get more cars but to get more profitable.
I can’t say that we’re a small company because we have a huge number of clients. I farm out a tremendous amount of work. But I only have five cars. Why only five? Because it’s extremely profitable.
Do I want additional cars? Not really. But I’ll probably get a SUV because that’s what some people want. And I’ll probably get another Rolls Royce because it’s profitable. The one I have now goes out Friday, Saturday and Sunday and makes more money than my 10-passenger stretch driving all week.