Advice for a fresh faced entrepreneur...

[KingRichard]

As a lot of you will know, I run a Private Hire taxi firm in Kent. We took on a going concern in February and are already doing very well.

Our monthly sales are up by 30%, and currently growing at the rate of 10% per month. I realise our growth won't stay at that pace forever, but it is remarkably healthy!

We've almost done everything we planned to do in our initial business plan. But that plan is starting to look a little outdated compared with where our business is and the dynamic nature of our industry. We want to become the market leader, but we don't want to sacrifice profitability, or our credibility by growing too quickly.

Now there are a number of things I am working on, but what I'm really after is some advice on how to prioritise things, and what to look for in opportunities (both sales, and operations).

For example, I could finance a shiny, brand new fleet and back it with PG's up to my eyeballs but there is little point if the fleet we have will do the same job. By the same token, how do you know if an old fleet is actually holding you back?

I guess I need some tips on how to actually analyse the current position of my business, and the potential. The work out a plan to extract that potential in the most efficient manor. After all, I'm only really here to get a nice crisp old porker on the drive of my big, crisp old mansion. Not fritter my money away on boocks I could happily do without!

Any suggestions of a good read are most welcome too. Also, does anyone know of a good networking portal I could join. The local chambers etc aren't really my cup of tea...

Cheers all

David

[KingRichard]

PieroW said:

Wish I could offer more advice, in terms of the fleet - wouldn't you have more chance of securing big corporate contracts if you had newish cars?

Yes, but on the flip side we could probably continue to grow the cash work with the existing fleet. Then on the flip side of that we would spend less on maintenance. Then on the flip side of that... we would be taking a bigger chunk out of the cashflow, and also launching ourselves into a world of debt and finance arrangements.

Then you have the issue with contract / account work, that you will have to give credit, and then run the risk of not getting paid on time. Some of the (very small) accounts that we already have are a right pain in the arse!

[KingRichard]

Fidgits said:

Do you do airport runs? Or more specifically - advertised specific airport rates/deals...

I reckon those have to be a pretty good return - especially since they will be pre-booked.

Funnily enough, nope... All the airport boys undercut each other to leave very little in it. It depends if the customer wants the backup of a company with spare cars in the event of break down, or leave it to chance to save a few quid.

Funny things, airport runs. Our standard fare to Crawley is £99. But to Gatwick, everyone expects you to do it for £55! Thanks, but I'd rather my car was in town for the three hours looking after our regulars

[KingRichard]

Carrera2 said:

Sounds like it's growing nicely with what you've implemented yourself. No need from help

If you want to grow have you considered buying another firm and working your magic on that too?

I've been offered one for peanuts, but they are predominantly Hackney Carriage and operate by finding work and charging drivers a circuit fee.

That's not my game.

Not to say that it wouldn't be at a later date, but we're on a mission down here and I don't want to set up another firm in direct competition. Them doing not so well can only be a good thing for KingRichard inc.

[KingRichard]

Percy Flage said:

I used to work at a place that espoused the benefits of Business Networking International - BNI. All sorts of small business persons getting together on a regular basis, usually stupid o'clock for breakfast. Many swore by it. I swore about it, but then I don't do early.....

http://www.bni-europe.com/uk/

I went to one of their meetings... about 50 tts that were trying to sell utilities warehouse pyramid schemes and the rest were one man band builders, heating engineers, plumbers etc... No real chunky business to be had. Plus they wanted a right shitload of money to join.

Thinking more of engineering companies, pharmaceuticals, government departments that sort of thing. Organisations that actually want to move a fair number of people and items around. London first was an excellent one, but obviously now being out of the smoke that one is of little benefit

[KingRichard]

Stephanie Plum said:

On the odd occasion I take a car I want it to be clean, relatively new, non smoking and for it to turn up on time, with a driver who has sufficient nous to work out whether I'm in the mood for a chat or not.

Bloke down my way makes a very nice living chauffeuring people who live on the crown estates, of which there are quite a few, who need taking into the City and to airports. From what I can gather money becomes less of an issue with those accounts than service and reliability, and an executive car. He runs a BMW 7 series for this job, and then a Volvo and people carrier for other work. Any similarly posh estates in the area you can market to to supplement the normal service?

Our oldest cars are '53 plate. They are smart enough but you can definitely tell they have had 4 years at the mercy of the cab trade.

TBH, there is about a 10mpg difference between our current fleet and replacing with newer, more efficient cars. That saving in fuel is actually massive. Also they would be less troublesome so less on maintenence.

The chauffeur market, we are moving into. Just a case of when, where and how hard we hit the market. At the moment there are a lot more slices of the pie available in the cab market down here. And boy am I hungry

I'm more trying to work out all the variables and make a decision. I know most management processes are hogwash, but does anyone have any experience of taking a snapshot of a business, identifying the old SWOT analysis doobrie, then working out what needs doing.

Basically I want to work out what I can save money on, what extra I can make with what I have, and if that would be limited... what I would need to spend to achieve what I want to.

Do I need six sigma? (tongue firmly in cheek )*

*Mainly because I don't know what the fark it is

[KingRichard]

groomi said:

I think you need a fleet of supercharged Jags - that should make you a small fortune.




Assuming you had a large fortune to start with...



Seriously though, unless you're going for corporate work then the age of the car shouldn't matter as long as it's clean and reliable. As already mentioned, the drivers attitudes are more important to the public.

I guess the question to you is this: Which is your most valuable asset?

A) Cars
B) Drivers

If A, then you need shiney new cars. If B, then you need the best cabbies out there... which means training and poaching.

Hi Iain

B). Definitely at the moment.

I can't help but think new cars would improve our image with new customers. But tbh, it seems that once a customer is persuaded to give us a try once or twice, then they start to become loyal. We have a really good mixture of cab drivers on our circuit. Some have 20 years experience. Some old (one is 75 bless him) and some young who work their nuts off 14 hours a day. We've made a real effort to keep the ones who fit our personality and can pass it onto the customers, and also to look for those qualities in anyone we've taken on.

So really, that shiny new car is only of limited value image-wise... our brand identity is service, not spangly cars. But it would really send a message out that we're serious. We've also got some work coming up after the summer break as we've got ourselves on the student union card! I'm a little worried that our cars will start to break down with loads of extra use. And an unreliable fleet is as good as an unreliable service. That could threaten our brand identity massively.

[KingRichard]

Rico said:

Good advice so far. Esp the "posh cars for posh pickup/destination". That's a good idea.

KingRichard said:

For example, I could finance a shiny, brand new fleet and back it with PG's up to my eyeballs but there is little point if the fleet we have will do the same job. By the same token, how do you know if an old fleet is actually holding you back?

I'd get one posh car in. Then when a punter rings up, say "£15 for a Vectra (or whatever you currently run) or for £25 we'll pick you up in a Merc". Analyse the results of that question. If more go for the latter, assuming its more profitable, then buy more Mercs etc.

I'd rather stay clear of that end of the market until I've got the cab game where I want it. What happens if the onlyy car available is the merc for a job that was quoted for a normal car? Run at a loss? Me? I don't think so

I think to be fair, when I move into the chauffeur market it will be with an entirely different company, structure and ethos.

Minicabs are basically what we are talking about here. Do I buy new ones or stick with the old ones? What about taking on office staff to allow us full 24/7 availability, can I afford it? Can I afford not to?

Thats the sort of stuff I need help working out. I feel like all the decisions we've made so far have been on a hunch, but now we are getting to the stage where a careless mistake could be extremely costly, I'd just like to be in a position to look at some quantifiable figures and notes that will confirm, or disprove any 'gut feelings' we have.

I've got my hand on the helm, and know how to steer and read the compass, but no map exists and its my job to make one as I go... if that makes any sense!!! God, that sounds so David Brent!

[KingRichard]

Thanks Iain

That is quite a good idea, and would prevent me from having to finance too much at once. I could even hang onto our older cars for the saturday night idiots and not be too put out if one does get yacked in. Good plan. In theory then, I could increase my fleet size to 8 company owned cars and 2 owner-drivers very quickly. If I filled those up and kept them busy my turnover would be 'limited' at £1.7m

In reality a fair bit lower... but I've just worked out we are currently utilising around 25% of our fleets potential. The cars won't earn money parked outside a drivers house, or sitting in the yard. I know I'm arguing most of the points raised on this thread, but it's great being able to vent somewhere. I was in a bit of a 'wood and trees' situation. Now I'm getting a clearer picture of what needs to be done.

I've had a wicked marketing idea as well. To increase customer loyalty and introduce new customers. Basically we announce the campaign by text to our customer database (how many taxi companies can do that eh? ), we tell them to go to our new website to register for a £5 discount from their next fare, then we give them a PIN in return for contact details (to be used in later promotions only), and then we offer them the discount for each and every new customer that they introduce to us. The new contact uses the PIN number of the referee when they make their first booking and that automatically tells us to offer the discount when the referee makes their next booking.

Beauty being that we have all the technology in place to do it, so all it will cost us is c.£2 per new customer by having to pay the drivers cut of the discount.

Genius eh? So a new customer, and another layer to add to the 'pyramid effect', and a guaranteed customer each time we pay out.

Inspired

I'm available for consultancy work @ £1000 a day

Edited by KingRichard on Monday 2nd July 23:08

[KingRichard]

groomi said:

KingRichard said:

I've had a wicked marketing idea as well. To increase customer loyalty and introduce new customers. Basically we announce the campaign by text to our customer database (how many taxi companies can do that eh? ), we tell them to go to our new website to register for a £5 discount from their next fare, then we give them a PIN in return for contact details (to be used in later promotions only), and then we offer them the discount for each and every new customer that they introduce to us. The new contact uses the PIN number of the referee when they make their first booking and that automatically tells us to offer the discount when the referee makes their next booking.

That sounds like a good idea, however I'm going to play devils advocate for a moment.

When I book a cab it's simply as a means to get somewhere. I don't want to think about the cab bit, I'm thinking about what I'm going to do when I get there. So a pin number system is possibly overcomplicated as I'm never going to remember that my mate told me to phone KingRichard Cabs and use this 4-digit pin to get a £5 discount...

What's wrong with what every DIY catalogue in the land offers - a cash discount when you introduce a new customer? By the sounds of it you have a customer database. So when a new customer phones up(you take their name to add to the database - conveniently checking if they are already a customer), they then give you the original customers name (you check database) and credit the 'account' of the original customer with £5.

Like I said, I think the ideas good but a bit too complicated for a promotion.

Excellent point. I'm just trying to restrict the abuse the system may be open to though. As my business grows, I will add members of staff to take bookings etc. I'd like to trust people but just know that I won't be able to 100%. Liabilities walk on two legs, as they say...

If we offered a £5 discount for every new customer introduced, with a maximum one time discount of £25. Then start accumulating again. I reckon the students would go for it, and would be willing to register their details. We could then publish a newsletter with details of airport promotions, discounts, free gifts, special offers from local business', local events etc etc etc.

Every new customer can also register their details and recommend someone, so they then get their own discount. Surely if you can educate people to register with you, the promotion becomes self perpetuating?

[KingRichard]

Rico said:

Using the txt idea... what about SMS bookings?

If someone's in a nightclub, they won't/can't make a call easily, so booking via txt would work

Already thunk of that one. Watch this space