The respected industry consultant talks about success, leadership, and innovation.
With his life savings of $600 in his pocket, baby-faced 19-year-old Scott Solombrino needed to make enough money during the summer of 1979 to pay his college tuition for the fall.
Instead of getting a routine summer job, he bought a 1968 Cadillac limousine and established his own service, Fifth Avenue Limousine.
“I decided I would buy the limousine and hustle business all summer long doing funerals and weddings. My mother and father told me I was insane. All my friends laughed at me,” he recalls.
Nobody is laughing anymore. Eleven years later, the still baby-faced Solombrino runs a successful 72-car operation in the Boston suburbs. Moreover, he is president of the Dav-EI International limousine network that has affiliate livery services in numerous cities around the world.
Although Solombrino started by catering to funerals and weddings, today the company bases most of its business on a combination of corporate, hotel, and airport transfer commerce. Fifth Avenue can credit much of its success to Massachusetts’ diverse high-tech economy in the 1980s. However, the company’s fruition has also been fueled by effective management techniques. Among other things, a unique chauffeur payment system, quick vehicle turnaround time, effective communication, reservationists on duty 24 hours, and a non-existent marketing budget are some of the key ingredients to Fifth Avenue’s success — and the prosperity has been meteoric.
Back in 1979, the efficacious Solombrino was able to hustle the $5,000 he needed for his education at Suffolk University in downtown Boston. In fact, by the end of the summer he purchased a second car — a 1969 Cadillac limousine. “A friend of mine drove part time when he could and I drove when I wasn’t in school. I just kept getting a demand for these cars,” he says.
One reason for the high demand was that Solombrino kept the vehicles in pristine condition. “I polished and waxed them three times a week. I had them running in tip-top shape.” Within six months of his initial limousine purchase, Solombrino realized he needed a brand new limousine. His problem was how to convince a bank to loan the money to a 19-year-old full-time entrepreneur and full-time student. “I got turned down by 10 or 15 banks. Nobody wanted to do it. I had no credit,” he recollects.
He was finally able to convince a banker to give him a loan and bought a brand new 1979 Cadillac limousine. He hired a full-time driver and began picking up corporate and hotel business to supplement the wedding and funeral trade. Within two years, Fifth Avenue was sporting a fleet of 24 vehicles. When he graduated, Solombrino decided to continue to pursue the limousine business.
How does a start-up service garner corporate business in the highly competitive Boston market? Without a marketing budget, Solombrino began walking door to door in the business community. “I would go to the corner and up the street. I went o banks, insurance companies, and brokerage companies. I made six to eight calls per day. I got a break and began working for some wealthy New England families and they referred me to all their friends.” One of his first customers was Wayne Newton, who subsequently began referring people to Fifth Avenue.
Smoke and Mirrors
Solombrino believes one of the keys to procuring new clients is to create a perception of an elite, comprehensive, reliable, and efficient service — even if you have to play a few tricks to make it work. For instance, the name “Fifth Avenue” was derived from the need to create the perception of a New York company. “When I bought my first car, I knew that people would have to think that we are a division of a. New York company,” Solombrino admits.
The same philosophy worked in landing some big corporate clients and hotel accounts. After making an initial personal sales call, Solombrino would offer limousine service to the client on a trial basis. “I would tell the dispatcher that in the next few weeks, the client is going to test us and want a car right away. I would always have a car parked right behind their building for the first few weeks. So when they called, the car would be there in five minutes,” he says. “I’d tell them later, I have cars everywhere.”
“With hotels, I would guarantee them a car in 15 minutes. It was, at that time, a lot of smoke and mirrors convincing people we had cars everywhere. But we did a great job and always got repeat business.” He admits the practice was risky, and sometimes he ran into service trouble. “We had a rule that we could never turn down a job — no matter how busy we were. Sometimes we lost money and got real screwed up, but that basic credo built Fifth Avenue.” Today, the company doesn’t need to create any illusions of service because they have the fleet and the efficiency to satisfy their clientele.
With such rapid growth, Solombrino had to keep tight reins on the structure of the company. He tries to get the most out of his employees, and believes an operator needs to do this in order to survive profitably. For example, Fifth Avenue keeps the number of reservationists to a minimum. For the customer, this means three or four extra rings before being helped, but the cost savings are tremendous, Solombrino believes.
Another example is chauffeur management. “You have to keep your chauffeurs busy all the time. You must have enough work for them all the time — so that they are begging for time off. But never give them the time off,” he says. “The biggest joke at Fifth Avenue is that it’s slave labor because once you get to work, you never go home. People would quit because it’s too busy.”
The reason chauffeurs would tolerate the long hours is because the company pays its drivers tips on a weekly basis. According to Solombrino, this practice encourages the drivers to work longer hours. Drivers are required to be in full uniform and are sent through a training program. Currently, Fifth Avenue employs 140 people, of whom 115 are chauffeurs. Allot Fifth Avenue’s chauffeurs are treated as employees.
One key way the company maintains its efficiency is by following the counsel of its accounting and legal advisors. Solombrino’s accountants provide him with profit ratios on a weekly basis. “They indicate where I need to control costs. I would go back and initiate all the changes,” he says.
For instance, the financial figures impart that it is ideal to unload limousines after 18 months of service. After that point, the maintenance costs outweigh the advantages of keeping the older vehicle. “After 18 months, we refurbish the vehicle and get it into peak shape for resale,” he adds. The financial data also tracks when it’s time to add or reduce the fleet size by tracing subcontracting business as well as other factors.
The accounting firm has been extremely important to the company mainly because Fifth Avenue has just computerized in the past three months. “I didn’t like to admit that before,” concedes Solombrino, “but we have always been a manually operated company. We are going through a transition process right now with training and software. So far, we are finding the computers are bogging us down. It’s causing trauma for us internally, but we will work through it.”
Of the company’s 72 vehicles, just over half are sedans, a few are vans, and the rest are stretch limousines. “I don’t think sedan business is the future, but sedan business is the next stage until the economy turns around, which I think will be in 1993,” predicts Solombrino.
In this same vein, Solombrino believes rates will remain highly competitive for the next few years. His company’s are currently $35 per hour for a sedan and $46 per hour for a stretch. According to the latest Limousine & Chauffeur Operator Survey, the national average is $37 per hour for sedan and $50 per hour for stretch. “My rates are not going to go up for at least a year and a half. We can’t price people into taxicabs right now,” he believes.
In addition to its regular service, Fifth Avenue also has a multi-year contract to operate a shuttle bus service at Logan Airport transferring passengers from the ferry boat docks to the terminals.
As president of Dav-EI, president of the Massachusetts Limousine Owners Association, and president of Fifth Avenue, Solombrino has come a long way from being a student in search of a summer job.
The respected industry consultant talks about success, leadership, and innovation.
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