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Bringing motorcoaches into your fleet is a major undertaking and one no operator should take lightly. If done correctly, it could be the biggest and best business opportunity for your company, but the downside is equally as daunting.
My brother, Robert, and I took the plunge in 2007, and 10 years later, our coach business is very successful. But if I could do it over, there are some things I would have done differently. Here’s my reverse wish list of tips and knowledge I could have used before I started running motorcoaches, and which could now help an operator considering it.
Seek help. Look inside and outside our industry. Go to the motorcoach industry. Partner with people who you are farming to and learn the business from them. I didn’t have anyone locally in the limousine industry who had buses. We were the first in our market to bring motorcoaches into our area, so we needed to look outside the industry for answers. Talk to others before you jump in. I am always happy when people visit my office and ask about what it takes to run motorcoaches, and what kind of investment in finance and time is needed to start a business unlike a limousine business.
Don’t be too proud to ask for help. You would be surprised how many people are willing. Use every resource available to you before you invest the money in a motorcoach. Do your homework.
Location: Atlanta, Georgia
Partners: Robert and Hoss Oskouie
Facility: 55,000 square feet on two-acre lot
Bus acquisitions: Bought first two minibuses, 2003; first two motorcoaches in 2007
Fleet vehicles: 75+
Fleet types: 15 coaches, 13 minibuses, 11 Sprinters/Vanterras/vans, nine limousines and limo buses, 20 sedans, seven SUVs, and a few antiques/exotics
Employees: 100+ office staff, chauffeurs/drivers, detailers, mechanics, and sales personnel.
Contact information: (770) 751-7078; www.atlanticlimo-ga.com
You can’t be an expert at everything. Join peer groups and attend trade events such as BusCon Expo and those put on by the United Motorcoach Association and the American Bus Association. These events will open your eyes to the industry you are about to enter. Join the local chapters of bus associations, attend, and participate.
Knowing the right time to buy a motorcoach is critical. Do an in-depth analysis of the market you are in. Who will be your competitors? Are there opportunities to work with those individuals if you make a purchase? Know how saturated the market is. Work your forecasts. Spend the time to figure out how many calls you get for motorcoaches. How much work have you lost because you don’t have them? How many jobs have you farmed? How much of that market do you think you could capture with one, two, or three buses? What will you need to do differently to get this business? If you are farming $10,000 or more per month, you need to make a purchase. If you are thinking of buying one bus, think again and make it two. Rarely do we book only one bus. For groups in our market, it is always two. This also leaves you a backup when a bus is down for maintenance.
With all of that said, sometimes you just need to take the plunge. If you know and have weighed the risk and are willing to take the chance, then go for it. You didn’t get into this industry without a few risks, so this is one of those times when your intuition will put you in the right place.
Buy your motorcoach months before your busy season. In our market, that is typically March and September. Have your buses a month before you need them so you can work out the kinks and put your logos and branding on them. Show them to your clients. Once they see your new buses, they will book them.
If you do not have minicoaches and a strong DOT program, you shouldn’t even get into coaches. Registering your vehicles interstate allows you to do work out of your state. You could have minibuses and not need to register your vehicles in this way or even want to take your buses out of state, but coaches must be on the road to make money. Hire an employee or consultant for the first six months, and train a person in your office to be your safety coordinator. There are many great consultants who can get you ready for your first audit.
Understand what licenses and permits you need to operate a motorcoach in your market. Motorcoach regulations differ from limo/livery. Determine if there are regulatory obstacles to entry. You may need a different business license than the one you now operate under. Insurance requirements may vary for these vehicles. Also, operating a motorcoach comes with a new set of rules from the Federal Motor Carrier Safety Administration. You need a full understanding of the requirements that range from electronic logs, maintenance, driver downtime, over-the-road requirements, and much more. There are services you can hire to quickly help you get up to speed. The time you save may justify the cost.
Coach buses are a separate category of vehicles compared to minicoaches. Simple repairs can take up to four to five days or longer. Cummings, Volvo, and Detroit service facilities are filled out with trucks, which make appointments difficult. Your bus could be sitting for days. When they sit, you stop making money. Bus parts are not always readily available off the shelf and ordering them adds to downtime. Stock parts to install when you need them.
If you plan to own motorcoaches, you will probably want an in-house mechanic to perform the light duty work. You can’t afford any downtime other than routine maintenance on motorcoaches.
If you cannot put a mechanic on board full time, look for someone who has a full-time job, perhaps in road assistance, who would be willing to work evenings and weekends for you. This will be a lead in to possibly bring that person in later as a full-time employee. Look also for detailers who come at night. Contract with a company that can do your cleaning and waste dumping. By having your own mechanic, you can get every vehicle inspected regularly.
You can do maintenance on your schedule while minimizing downtime, which keeps your vehicles making money. Good bus mechanics who can also work on the rest of your fleet are a commodity. Spend the time to find the right ones and include their costs in your business plan.
Invest in your mechanical personnel. Send them to diesel classes (paid and free). I did it with my mechanics, investing $15,000, and it continues to pay off. Send them to every class necessary for them to be top notch in their field and on your fleet.
Regardless if you purchase new or used, buses will still have maintenance issues. When buying buses, you should deal with a manufacturer or distributor that has a local presence. They can give you a loner when yours is being worked on, and they will have service facilities to get parts.
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