The CEO of Addison Lee North America will offer his perspective at the LANJ breakfast meeting Nov. 6.
LCT: Give us some background about Royal Coachman.
Jon Epstein: Royal Coachman was started in 1969 by my father, Robert Epstein, as an offshoot of his primary business which was a travel agency. It’s a typical story of the tail wagging the dog. The limousine company became very successful and soon became the primary business. In 1969, the limousine industry was a relatively new thing. Today, we are a 120-vehicle fleet based in Denville, N.J.
LCT: When did you get involved in the business?
Jon Epstein: Like most limousine families, I started when I was eight washing cars. I did payroll, dispatch; you name it. After college, I came into the business full time. My sister, Amy Birnbaum started the year before me. We purchased the company from our dad in 2004.
LCT: What markets do you specialize in?
Jon Epstein: Pharmaceutical companies. They too are down but not as much as the other markets. They didn’t take TARP funding, but we still feel the downward pressure from them to reduce their costs and our prices.
LCT: How has the economy affected your business?
Jon Epstein: We are down about 22% in revenue, but we actually had a 2% profit increase for the first six months of 2009.
LCT: What would you attribute the fact that your profits are actually up while revenues have declined?
Jon Epstein: We spent a lot of time on the budgeting process working out all different revenue scenarios with goals and action items. It’s easy to get caught up in the day to day business of running your business. You need to step back and assess your organization. Everyone who works in our organization is part of our team and we make sure that we are communicating with them when we are doing things and also that we are listening to them. They are on the front lines and they see things that the management may not. We meet with our chauffeurs quarterly and the rest of the staff in meetings every two weeks.
LCT: Are you an employee or independent contractor chauffeur model?
Jon Epstein: We have all employees. We have always operated in this way.
LCT: What are some of the things you are doing to combat the downturn in business to our industry?
Jon Epstein: Expense reductions throughout our company. We look at every expense line item and see what we can knock down. Operators should look at reducing their rent and expenses to all of their vendors. Everyone is suffering and our customers are asking for reductions, so why don’t we also ask our vendors? I am proud to say that only Amy and I took pay cuts. We did not to chauffeurs or our office personnel’s salaries. We looked at other areas. We sit in budget meetings and look at every single line item. We question every expense. Take trade shows as an example. We evaluate if clients are going and how many competitors will be there. We look at what we want to achieve and if there is a less expensive way to achieve the same goal. One of the big things we did was eliminate overtime within the organization. This was huge. We talk to our people and make sure everyone understands and is on board.
LCT: Are there markets out there that remain strong other than pharmaceutical?
Jon Epstein: Still a fair amount of relocation work. Relocation shuttles are good work but it does go away. Initially, companies need ways to get people to the new location through inter campus shuttles — building to building, train station work, etc. It usually dries up within a few years.
LCT: What are you doing to reach these accounts?
Jon Epstein: We have a sales staff comprised entirely of our principles. We divided up the markets. One of us is always out farming and maintaining business.
LCT: What advice would give small operators who are also trying to stay alive and even grow their businesses?
Jon Epstein: Open your self up to every market you can (depending on your fleet). One of the problems smaller operators have is that they depend on local subcontracting which has paired down quite a bit. It is still there but it is more peaks and valleys. Operators need to leave themselves open and get out and sell to multiple markets.
LCT: Your sister was featured in an America Express commercial that was broadcasted nationally. How did you capitalize on that exposure?
Jon Epstein: After American Express ran the commercials, we ran a local public relations campaign to cultivate the local market. We had a good deal of local press interview us on how we were selected and then write about our being featured and our company.
LCT: How can small companies get broader exposure in your opinion?
Jon Epstein: Do things in the community that will get your name out there locally. Consider local charities in your town or in the county. You might want to consider donating to the local breast cancer walk or the score board for the local little league. This is a permanent way to keep your name in front of your community.
LCT: You operate in a very competitive market with a lot of competition. How have you managed to differentiate yourself?
Jon Epstein: Through our service. We share accounts with other limousine providers. One bad word gets around but so does a good word. Let’s face it; everyone has issues who handles transportation. It’s all about how you fix problems right away. It has always been about service. Everyone in our organization is empowered to provide exceptional service and handle situations.
LCT: What would your employees say about you and your organization?
Jon Epstein: We recently hosted an industry peer group meeting in our facility. We provided all of the transportation and a tour of our facility. Afterwards we let the members speak to everyone in the organization. The feedback we got is that our people are genuinely happy to be working here.
LCT: Would you recommend peer groups to other operators?
Jon Epstein: I’ve participated in a peer group for the last four to five years. It is great. It brings information gathering to a new level. We share what we are doing with everyone else and they do the same. You can always continue to learn. Today it is way more than just getting from point A to point B. Now, there are technology and training programs. There is so much more that you need to know in order to run your business
LCT: What changes have you made lately?
Jon Epstein: We are marketing much more through the web and social media. We are becoming active in social media and website. We have never done retail business. We have started both in house and with an outside company to manage our website and social media. It takes a lot of work to get you placed higher on the search engines. We track the results. We recently landed a corporate shuttle account that found us through a Google search. It continuously takes work. You need someone inside who can manage this for you. We are also starting to do the social media sites such as LinkedIn and Plaxo. We are still deciding which way to go but we do see the benefits of being on these sites. We want to know what is being said about us. It all helps improve your Google rankings. We are just starting to learn about it and are fast tracking it to get the ranking up to increase placement on the search engines.
LCT: We see you at all of the industry events. What do you gain from them?
Jon Epstein: Initially, I want to stay in touch with new products. Now it is networking and meeting others through those people I already know. I handle the industry part of our business which is why you see me and not my sister. She handles the corporate end. Industry events are very beneficial.
LCT: Are you still active in the industry associations?
Jon Epstein: Of course. You have to give back to the industry to get back. I have been on the board of the Limousine Association of New Jersey since it started. I donate to the PAC. I also serve on the State Limousine Advisory Board. Everyone needs to be involved. The National Limousine Association has always supported the industry and does great things. I feel it is important to be involved with all of the associations.
Source: Linda Moore, LCT Magazine
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