Commentary: Jeff Rose, president of Limousine Association of New York, explains how the permit cap ignores vital for-hire differences.
At the November LCT-NLA Show East in Atlantic City I attended our “First Timers’ Orientation”, which preps new operators to get the most out of the show, sessions and networking events. What I discovered from conversations from many of the 25-plus attendees was their collective enthusiasm for the business and willingness to learn from others in the industry to grow their operations. But it’s not just small operators needing guidance to grow. Operators at all levels need to lean on others to gain the strategies and approaches to expand their operations.
This three-part series sprouted from those show conversations. We picked the minds of some of the most seasoned and successful operators who offer their advice to help fellow operators take the next steps.
*Editor’s Note: This is the first of an ongoing series focusing on how small, midsize and large operators can grow their businesses. The series will examine making the jump from small- to mid-size fleet operations, from mid-size to large, and large to top-tier.
Blocking and Tackling
New and small operators looking to double their business from an initial 1-5 vehicle start-up range need to understand that strategic growth requires focusing on the basic business practices that enable you to expand.
“Growing your business should be all about mastering the fundamentals early on so you are positioned to grow,” says Robert Alexander, president of a sprawling $25 million transportation empire in Montgomery County, Md., that includes RMA Worldwide Chauffeured Transportation, Orange Taxi and his BP station that services his fleet.
“I equate it to the basics of football—blocking and tackling. If you master those skills then you are in a position to do more because you have the fundamentals down. Begin with creating core competencies and a company culture that says ‘this is how we do it not what I think we should do.”
Interviews with seasoned and successful large operators echo Alexander’s advice, pointing out that to grow successfully, small-fleet operators (1-5 vehicles) must first master core management, sales, marketing and operational skills and procedures. Setting the foundations early on creates a company culture critical for long-term growth and success.
“If you’re at the 1-5 vehicle mark, you’re still doing everything yourself, then as you move to 5-10 you’re doing about 80%, and from 10-15 vehicles about 50%,” says Eric Devlin, CEO of Premier Transportation in Dallas. “The key to growth early on is to hire a general manager to handle daily operational issues to take them off your plate so the small operator can concentrate on sales and building relationships that grow the business. From 8 a.m. to 5 p.m. you have to be on the phone or on sales calls, then after hours you can get back in the operations and management side.”
Joe Ironi: Looking back, Ironi stresses that new and small operators put together a business plan. “Think long term but set incremental goals that are comfortable and attainable.” Operators must know how to prioritize, delegate and understand all components of a business. “This includes financials, labor laws, liability issues, human resources, and established procedures through training and manuals. It all starts at the top and the culture is set by the owner.”
Robert Alexander: “The most important thing for small operators is know your numbers — what is your true profitability? And when you book business make sure all of your costs are accounted for so you truly know what you are making at the end of the day. Understand your expenses in every capacity.”
Jeff Greene: “There is a lot of competition out there. I made sure our quality never changed and that we never gave a client a reason to go somewhere else. Top-notch service spurs growth. You never let staff lose sight of that. The old industry adage, ‘You’re only as good as you last ride,’ is true. Make sure you stay on top of your customers and what your competition is doing.”
Eric Devlin: “Most of us in the business are entrepreneurs rather than operators and you have to have that spirit to go out there and penetrate existing clients — which is the low hanging fruit — and get more of their business and also go after new business. But that means building a strong team that can take on more operational responsibilities.”
Blocking and Tackling (Cont.)
Two major points both Alexander and Devlin stress is that new operators often have a hard time letting go of every aspect of their operations and being honest with themselves to acknowledge the things they like to do, and the things they do not.
“I hated doing billing and accounting. It kept me up at night. If I had to do it all over again, I would have had someone take that over so I could focus on the things I liked to do,” says Joe Ironi, president of Toronto-based Global Alliance Worldwide Chauffeured Services. Ironi says that small operators need to get their financial and administrative house in order and then “strategize, prioritize and delegate to systematically grow your operation.”
Adds Alexander, “My advice is to do what you enjoy the most and spend 80% of your time doing that. If you like sales or operations do that. If not, hire people who can do those functions — and, you have to be able to hire people who you can trust to help you grow.”
A key strategic piece of advice Alexander offers is to hire in advance. “Hiring people early with skill sets you don’t have a year or six months before you are ready to take the next step can help you prepare for growth because you can build trust and work with them, and they’ll add value to your company, and expand your intellectual pool, so staff will be in place to manage growth.”
Alexander cautions operators not to get caught in “paralysis by analysis,” adding, “they have to give up control and can’t micro manage everything because that will hinder growth.”
Adds Devlin, “In my mind the key to growth is not more vehicles and chauffeurs but having the internal people in place maybe a year or two before you really need them. Yes, that can be a loss leader, but if you are out selling and building the business, then you have had time to build a team that you can get comfortable with and be ready to go.”
Devlin recalls that hiring in advance is a great motivator to get out there and sell. “You just have to bite the bullet and make a tough financial decision early that will pay off in the long run. But guess what? That hire provides a great motivator to get off your butt and get out and sell to meet your numbers.”
In addition, Devlin says one of the key attributes to growth is hiring team players who can multitask — and handle stress. This is a personality business, and new staff has to understand the importance of details, timelines, and professionalism.” He also stresses the need to establish a company culture early. “New staff need to know that a single $90 airport transfer really represents a big account or a potential big account. It’s not just an airport job. They have to understand the big picture and what we’re trying to accomplish.”
Importance of Technology
“Up until about 5 to 10 vehicles, you’re still a one-man band and wear a lot of hats. To make that initial jump after 10, you really have to have a steady client base, and it’s never too early to implement technology,” says Jeff Greene, president of Atlanta-based Greene Classic Limousines.
Greene explains that small operators can appear bigger just through the use of technology and help “level the playing field.” He says it’s never too early to get software to demonstrate to your clients and prospects that you are organized because “your customers will have more faith in you because even though you are small, you are running a smooth and professional business.”
He notes that small operators can use technology to run their operations from anywhere. “You have a laptop and WiFi in your car so you can take reservations, confirm reservations, and provide status updates. You can use all the technology big companies do, and show clients that even though you are small, you are smart and efficient.”
Adds Devlin, “I’m not a tech guy, but looking back I think we could have grown quicker and more efficiently if we had adopted technology earlier.”
Living the Dream: Small Florida Operator on the Fast Track
In the past four years, West Florida Limousine has become one of the largest players and fleets in the growing Gulf Coast Sarasota region. Sales are up more than 2,000% and the fleet has grown from two vehicles to 13. Sales in 2011 were $40,000 and skyrocketed to just shy of $800,000 in 2014. “Our goal is to hit $1 million in revenue next year,” owner Duane Miller says.
The company’s fast-track growth is embedded in being aggressive, working 16 hour days, providing great customer service, mastering technology, creating a great website, and using online advertising and search engine dynamics. It also helps that Sarasota is growing and the economy is improving.
Miller started out as a one-man SUV operation that would take pass-along, one-off jobs from area operators who needed an SUV to haul people to and from airports. But since day one, Miller knew that in order to grow and compete, he had to provide exceptional customer service. “We work long days, no vacations in years, and we answer all phone calls 24/7. We tried an answering service and that wasn’t any good. I still drive some clients personally,” he says. In fact, Miller makes it a point to personally drive new clients to meet them and make sure he delivers the service they expect. He also chauffeurs a few corporate CEOs who have been with him since the start.
“It helps establish a personal relationship and I get to know them, which really helps the business because all of my regular customers know me and I know something about them. I am their buddy, and when they call and speak to me they know I will take care of them.”
Miller’s growth also stems from knowing his market and stocking his fleet with vehicles that provide a return on investment. “In this area you have mostly retail, tourism, and snowbirds who come and go during the winter who basically only require a nice, clean vehicle with professional service that is on time.” To that end, you won’t find any high-end luxury German cars. Rather, his fleet includes Chryslers, Cadillacs and an aging but oft-requested Lincoln Town Car. “You have to know your market and match your fleet to that market and that lowers your fleet costs,” he says.
Now that the company has grown beyond one-man, one-car, Miller’s wife helps full-time to run operations, payroll, reservations and dispatch. The company employs six full-time chauffeurs and several part-timers.
Miller’s growth also stems from acquiring a few small operations and retaining their names to funnel leads and traffic his way. “I wouldn’t have imagined three years ago that I would have become one of the largest operations in Sarasota. I’m not sure how much more I can handle, but we have not hit a plateau yet. It was just so much growth so fast I’ve not had time to think about it.” But one thing is clear. Miller’s early attention to personal customer service, building relationships, and knowing his market are three core business strategies that have him on the fast track.
Commentary: Jeff Rose, president of Limousine Association of New York, explains how the permit cap ignores vital for-hire differences.
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