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Stan and Kathy McColley operate A Touch of Class Limousine Service out of their home in San Jose, CA. Although Stan admits that working in the home, “Is not conducive to the business sometimes,” they have created a healthy, two-car livery company, and have become prominent members of the limousine industry in Northern California. Stan and Kathy are active in the Northern California Limousine Association, and are also members of the National Limousine Association.
Stan and Kathy spoke recently with Limousine & Chauffeur about the difficulties of maintaining an office in the home, as well as about some of the issues facing limousine operators.
Limousine & Chauffeur: How do you feel about running your business at home?
Stan: It’s not easy because, sometimes, home and work don’t mix. We have eight kids, and five grandkids, and sometimes it becomes a conflict. You try to do three things at the same time and it can be difficult... but it works. Kathy works very hard at it, and is really the backbone of the company. She is a very strong person, with a good background in accounting.
Limousine & Chauffeur: What basic kinds of service do you offer?
Stan: We do quite a bit of share-ride as well as private car service. Share-ride involves another permit from the PUC. That allows me to pick one person up... go down the street and pick someone else up... and then pick a third person up and take them all to the airport.
We have been doing that since we started our business four years ago. I’ve gone out and made hundreds of sales calls to travel agents I figured they would be one of our main markets… and they have been.
This business has been a good business … but it’s been very difficult and I don’t know if I would get into it again because there is such a demand on you. There is always something you need to do. One of the disappointing things about this business is that there are so many dishonest people… and half of my bad accounts are other limousine services.
Limousine & Chauffeur: Isn’t that kind of thing simply part of the business world?
Stan: Yes, but there has to be something that pulls us together in this industry... and I think it should be honesty and fairness If I tell someone I’m going to do something for them... I do it. A lot of companies make promises that they don’t keep. That includes some of the coach-builders… and goes right on through to chauffeurs.
Limousine & Chauffeur: Doesn’t honesty and reliability pay off in repeat business?
Stan: It does to a degree. But, for example, we don’t change our rates while a lot of other companies do. I have a tough time with that. When something big comes along... it seems like everyone pumps their rates up. Once you set your rates, I think you should stick with them. One person I know got $1200 for the day of the Super Bowl. That’s gouging. I think that’s taking unfair advantage of a situation.
Limousine & Chauffeur: Wouldn’t it attract business if your advertising explained that you are a licensed, insured, and reliable company... and that you are a member of the local limousine association as well as the National Limousine Association?
Stan: I don’t know. There’s got to be some way.
Kathy: We need to create a more positive image for the limousine business. One thing we do to get our message out to customers is to send out a mailing of at least a hundred letters once a month. Out of that mailing, we usually get about fifteen phone calls requesting more information. We figure the mailing pays for itself if we book at least one new regular customer from it.
We had an ethics committee at our association for a while, and people had a hard time deciding what is ethical in the limousine industry. They said, “I know I don’t like it when someone steals my customer.” But a code of ethics is something different... It is a set of guidelines for providing the best possible service for your accounts, and for dealing fairly with your competitors. Unfortunately, our ethics committee never really got off the ground.
When someone calls and asks for a kind of car we don’t have... I tell them where that kind of car is available, but I take offense when I see brochures showing yachts, planes, Rolls Royces, and things that don’t actually belong to that company. That’s false advertising. You’re making people think those things actually belong to you.
Limousine & Chauffeur: How many members are there in your association?
Kathy: We ended last year with eighty-three members but about half of them did not rejoin this year. They failed to see the benefits they received. There was not one member who did not receive $150 in benefits from the association last year.
Limousine & Chauffeur: Does the association actively provide referral business?
Stan: Yes... But you have to attend the monthly meetings and get to know people. One member, for example, has one car and told me that he didn’t have any business… things were really slow. We talked with some of the members and they passed along extra business to him.
Limousine & Chauffeur- You have two company-owned cars now… How do you plan to grow from here?
Kathy: We have two company-owned cars and two owner-operators. I would like to get a white stretch. We could probably use two more company-owned cars. We are facing some rising costs now, though, like having to pay the state for workman’s comp.
Limousine & Chauffeur: Are your association members facing up to state requirements like workman’s comp?
Kathy I think it looks good to the state if we take the initiative to police ourselves on this. Some association members, though, are opposed to us “opening a can of worms.” What they don’t realize is that the can of worms is there and has already been opened.
California is taking a really hard stand as far as employer responsibility. We spent a day at the workman’s comp board and said, “If our drivers are independent contractors, why do they need workman’s comp?” They said if a driver is injured or killed. It comes before a jury that will look at the situation and, every single time, they sympathize with the employee.
I called our attorney and asked if there was anything we could do. He said we didn’t have any choice. Ah insurance company will cover passengers, and the car itself, but they will not cover the driver. Without workman’s comp, drivers are completely uncovered out there. We set up a program where our owner-operators will pay for their own workman’s comp coverage through our company. It’s much cheaper than if they get it independently.
Limousine & Chauffeur: How has it worked out to have your office in your home, and live with your work continually?
Kathy: We have three kids living at home and, over a long period of time, they have become resentful when we allow our limousine service to dominate everything. What we try to do is leave the office at five or six in the evening. We have someone who comes in to answer the phones and, unless it’s an emergency, we ask her to take messages. We would sit at the dinner table and have continual interruptions.
We have learned to say no to spur of the moment business that would interrupt our home life. It’s been a hard lesson for us to learn.
The associations require our time too. We get calls from all over the country about insurance. Also, Stan spends a lot of time with people who are starting their companies. We have several new members in the association who say they would never have made it in the business if it hadn’t been for Stan.
If we had known all of the ins and outs of this business beforehand, Stan and I might have had second thoughts. It has demanded almost all of our time and most of our money. We really could not have put in all of the hours that were required if we hadn’t done it at home. We were in an office building for our first three months, and we were never home. Our kids deserve more than that.
Another difficult thing is that your business draws on your personal credit, and stretches you to the limit. It creates pressure in your personal life as well as in your business.
Limousine & Chauffeur: Are you beginning to see light at the end of the tunnel?
Kathy: Yes. I know we’ve made this sound difficult, but it’s a good business, and it’s a good way for people to be able to work for themselves. There is demand for limousines, but it takes some expertise for people to succeed in the business. There are so many new people in the business that it will take a while before this industry knows what it’s doing.
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Stan: We’ve got to continue building our associations. The Northern California Limousine Association has joined the NLA so that our people can take advantage of the insurance program, and we have tried to support the NLA here on the west coast.
Kathy: We have enjoyed the limousine business, though. For every turkey you meet, there are five hundred nice people. For the most part, you see people when they are at their best... they are going out for the evening.
And we’ve really been fortunate working together. There have been times when I’ve gotten fed up, like when we’ve had to write-off something that I didn’t think we should have to write-off, and Stan has said “Don’t worry about it. We can either write-off the bill, or write-off the customer.”
You have to be flexible in this business and we are learning that. We are learning to just do what we have to do... and we know it’s going to pay off.
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