TOO MANY LIVERY

Document Sample
TOO MANY LIVERY Powered By Docstoc
					                                             LIVERY
                                             TOO MANY
         How do you

                                             P
                                                              urchasing a livery vehicle is more difficult today than in years
                                                              past. Not only are there more choices of new vs. used and

      select the right                                        which coachbuilder to consider, but also vehicle type, length,
                                                              style, options, and many other factors. Also, with the corpo-
     fleet vehicles to                                        rate world choosing more conservative means of transporta-
                                                              tion, operators are purchasing more sedans, vans, and stan-
            serve your                                        dard SUVs than ever before.
                                                 How do you know which vehicles are right for your company, or which
        market niche                          coachbuilder to use? Since many mechanics are not familiar with limousine
                                              operating systems, are there ways to check out a used vehicle to be sure it is
           in retail or                       dependable and safe? What about financing? Knowing how to approach a

            corporate                         bank is as important as choosing the best fleet vehicles.
                                                 The purchasing process can be an intimidating task, especially for new op-

             business?                        erators. However, following certain guidelines and doing your homework can
                                              lessen the aggravation and avoid the pitfalls many newer operators fall into.
               Here’s a                       CHOOSE YOUR COACHBUILDER WISELY
     comprehensive
             guide for                        W            hen purchasing a personal vehicle, whether you buy a Ford, GM,
                                                           Chrysler, or an import manufacturer, you know you are buying from
                                                           an established and regulated OEM. However, when purchasing a
                                              stretched or other altered vehicle, how can you be sure you are buying a qual-
      start-ups and a                         ity vehicle from a reputable manufacturer?

      great refresher                             There are many coachbuilders in the market today that build quality prod-
                                              ucts and have great reputations. Yet, there are some fly-by-night operations

              for pros.                       that sell a few vehicles and then disappear, leaving a host of dissatisfied op-
                                              erators in their wake. These companies lure unsuspecting victims with the
                                              promise of an inexpensive alternative in the marketplace.
                                                  “If the price sounds too good to be true, it probably is,” says Phil Restivo,
            By Wayne Blanchard
                                              owner of LimeLite Coachworks in Santa Clara, Calif. “Quality costs money! If
                                              you pay $25 for a Rolex, then you know you bought a cheap replica that is
                                              probably not worth the materials it’s made from. The same goes for a limou-
                                              sine.” If you search for a livery vehicle using price as your only criteria, you
                                              will probably be taken for a ride, and not by the vehicle.
                                                  Restivo recommends checking out the coachbuilder to be sure they are le-
                                              gitimate. If the vehicle you are purchasing is a 120” or smaller car, or a 140”
                                              or less SUV, then you can generally check to see if the manufacturer is a cer-
                                              tified QVM (Ford) or CMC (Cadillac) builder. “These are certification programs
                                              by the original vehicle manufacturers to ensure the stretch is being built ac-
                                              cording to set guidelines,” he says. “Of course, when you start to look at the
                                              longer vehicles or the exotics, your research gets more complicated.”
                                                  Since there are no certification programs in place for these vehicles, you
50     L I M O U S I N E & C H A U F F E U R E D T R A N S P O R TAT I O N   NOVEMBER 2006                W W W. L C T M A G . C O M
VEHICLES:
GOOD CHOICES
need to do your homework. Restivo says there are cer-              them out well. The quality of the materials is crucial.
tain things you can look for:                                      The electronics, for instance, should be a quality brand
■ Be sure the company has manufacturer’s and garage                name. “If they scrimp on the things you can see, imag-
   keeper’s insurance                                              ine what they do on the things you can’t,” adds Restivo.
■ The materials used should be high quality such as gal-
   vanized panels and thicker gauge steel                          NEXT: CHOOSING THE RIGHT VEHICLE
■ A good reputation
■ A strong warranty program — they must be willing to
   stand behind their product
■ Time in business — tried and true is not just a saying
■ Be sure all welds have thorough beading all the way
                                                                  O         ur industry is split into two major segments: cor-
                                                                            porate and retail. Even though there are com-
                                                                            panies that cater to both, most have one primary
                                                                   niche. New companies generally don’t have the finan-
                                                                   cial resources to accommodate both markets out of the
   around.                                                         gate, so it is wise to target one market at the beginning.
   When dealing with limo buses, even though the vehi-             This is why it is wise to research your market and de-
cles themselves are not altered, you must still check              termine which one is best to start with.




                                                                                                                                              ▲




                                                                                                                 ILLUSTRATION: RON RENNELLS


                                    L I M O U S I N E & C H A U F F E U R E D T R A N S P O R TAT I O N   NOVEMBER 2006                 51
 S T A R T • U P        B O O T       C A M P

 How to select the right fleet vehicles
 to serve your market niche

Retail: The retail market segment is perhaps the most
difficult one to determine says Restivo. “There are al-
                                                                                                           “If the price sounds too
ways new fads and evolving tastes,” he says. “However,                                                     good to be true, it probably
new operators who are operating a single vehicle need
to purchase a vehicle that has diverse applications.”                                                      is. Quality costs money!”
   A white 120-inch stretch can be used for a multitude
                                                                                                           — PHIL RESTIVO
of applications in the retail industry. “You can find these
cars with interiors ranging from subtle to outrageous,”
he says. “The best part about these cars is whether you
have a wedding, prom, bachelor/bachelorette party, or                             up for a serious financial fall.
even a birthday, they will always be in demand.”                                     Another consideration when purchasing a vehicle for
   As a general rule, the mega stretches, stretched SUVs,                         use in the retail market is durability. Because of the tar-
limo buses, and other exotics, should not be purchased                            geted clients, partiers, children, and other overly-enthu-
until your company is established. You want to be sure                            siastic people, you don’t want a vehicle that is too deli-
your company is generating sufficient income to afford                            cate. Although some of these features are eye-catching
not only the payment, but also insurance, maintenance,                            and exciting, they may be expensive and difficult to re-
and fuel for such a vehicle. Without a strong client base,                        pair or replace. Look all features over carefully and ask
this type of purchase could set you and your company                              four questions: (see page 57)




                                                                                                                                                                 ▲
                          USED LIMOUSINE INSPECTION CHECKLIST
     When purchasing a used limousine, it’s not like choosing a                   more rigorous daily regimen than an everyday passenger vehi-
     new family wagon. These vehicles generally go through a                      cle. Extra care is needed and more items need to be checked.

                            ENGINE:                                               DRIVELINE AND                                        EXTERIOR:
                              • Noises: knocks,                                   SUSPENSION:                                           • Paint: be sure there
                              pings, power steering                               • Drive links: Be sure                                is no cracking, chip-
                              whines or any other                                 they have been prop-                                  ping, or flaking. This
                              noises that may indi-                               erly lubricated and do                                will lead to requiring
                              cate abuse or neglect.                              not have any exces-                                   a new paint job.
 • Rough idle or cylinder misfire: although it         sive movement or wear.                                • Rust: check door jambs, rocker panels, floor
 may only be a spark plug or sensor, it may also       • Carrier bearings: these also need to be             pans, bottoms of stretch panels, and body
 indicate a worn valve.                                checked for any “play” and proper lubrication.        seams. Once rust starts, it is very difficult to
 • Leaks: if the vehicle has a leak, there is a        • Springs and suspension bags: be sure                eliminate.
 chance it may be running low on a critical fluid.     springs are strong, airbags have no leaks and         • Body work: if a vehicle has had body work, it
 • Oil: not only level, but look for any foreign       compressor inflates bags promptly.                    could mean the vehicle has either been in an
 matter.                                               • Steering assembly: check for wear and loose         accident or has had rust repaired.
 • Coolant: be sure the level is full and the          parts.                                                • Door handles: be sure all door handles work
 coolant is dark green (or red if it is the environ-   • Tires: check for uneven wear as this is an in-      and all doors operate smoothly.
 mentally safe type).                                  dicator of an alignment issue, a worn front-end
 • Belts and hoses: if these have not been re-         part, or a problem due to an accident.                                          ELECTRICAL:
 placed as required, it could be a sign that other     • Brakes: remove tires and check for uneven                                     • Lights: be sure all
 important items were not properly maintained.         wear on pads and shoes as well as fluid seep-                                   lights and switches
 • Warning lights: this could be a sign of a seri-     age (all surfaces and housings should be com-                                   are working, includ-
 ous problem.                                          pletely dry).                                                                   ing flashers and
 • Cooling system: any electric or clutch fans                                                                                         warning lights.
 should be checked for proper operation.                                                                     • Comfort systems: heat, air blowers, and
                                                                                  INTERIOR:                  power windows. Also check the vents in the
                                                                                  • Carpets: carpets
                                                                                                             driver compartment switch over.
                                                                                  shouldn’t be worn or
                                                                                                             • Convenience systems: interior lights, power
                            TRANSMISSION:                                         faded.
                                                                                                             seats, power locks, power outlets, stereos,
                            • Leaks.                                              • Seats: check for
                                                                                                             TVs, and any other installed system.
                            • Smooth shifting                                     tears or holes.
                            and immediate lock         • Seat belts: be sure the vehicle is equipped         When inspecting a used vehicle of any kind,
                            into gears.                with the proper number of seat belts, and that        you should ask for all maintenance and re-
                            • Be sure there is no      they all work.                                        pair records and copies of all receipts. If
 chatter or shift hesitation when vehicle is run-      • Overall condition: look at headliners, bars,        you purchase that vehicle, then these
 ning at constant speed or deceleration.               mirrors, door panels and dividers, to be sure         records need to go with it. They can serve
 • Fluid: check level and be sure the fluid does-      there are no burns, cracks or other damage.           as a reference point for any service condi-
 n’t have a burnt smell.                                                                                     tion in the future.


54          L I M O U S I N E & C H A U F F E U R E D T R A N S P O R TAT I O N     NOVEMBER 2006                                  W W W. L C T M A G . C O M
                                                                                                      S T A R T • U P   B O O T    C A M P

                                                                                                     How to select the right fleet vehicles
                                                                                                     to serve your market niche

■   How   difficult is it to operate this feature?                                              “Having a solid presenta-
■   How   easy is it to break this part?
■   How   difficult is it to replace if broken?
                                                                                                tion is a way to convey to
■   How   expensive is it to replace?                                                           the bank that you know
                                                                                                what you’re doing.”
Corporate: Purchasing vehicles for the corporate mar-                                           — RON SORCI
ket is generally easier and less expensive than retail. “A
person who is starting a livery company and is target-
ing the corporate side of the industry may choose to
start out with a sedan such as the Executive L-Series                    see the surroundings and they feel more secure and
Town Car,” says Barry Trabb, owner of Universal Lim-                     safe,” Trabb says. “It comes back to identifying your
ousine Distributors in Wayne, N.J. “Dollar for dollar, it                customers and their needs.”
is one of the best buys that you can put into your fleet.”                  Once you are up and running, and determine it’s time
   This vehicle carries a 150,000-mile warranty which is                 to add a stretch to your corporate fleet, you need to
very important not only for the operator for use, but                    choose accordingly. Trabb recommends some guide-
also if you want to get top-dollar when you sell the car.                lines for purchasing a corporate stretch:
It is easier to sell a car with warranty still left on it, Trabb
adds.                                                                    ■ The vehicle needs to be a current body style.
                                                                         ■ Be sure the vehicle is not over-priced: The National
           “It’s all about finding                                         Automobile Dealers Association (N.A.D.A.) has a pric-
                                                                           ing guide that is just for limousines.
           that balance.What will                                        ■ Be sure the vehicle satisfies your client base: The in-
           give you the greatest                                           terior should reflect a more conservative atmosphere
           return from your                                                and shouldn’t be outlandish or festive.
                                                                         ■ The conversion shouldn’t be longer than 80-inches
           investment while                                                (6-pass.).
           providing the client the
greatest sense of satisfaction?”                                           Another thing to consider when purchasing any cor-
                                                                         porate vehicle is color. Dark colors are preferential for
— ROBER T ALEXANDER
                                                                         this market. “When dealing with executives, the light
                                                                         colors are considered too flashy and pretentious,” he
   Of course, the operator should check the market to                    says. “These guys want to be understated and low-key.”
see if this or another manufacturer’s sedan is the best
option, or if it might be better to purchase an execu-                   GETTING FINANCED
tive-style SUV. SUVs can usually accommodate more
luggage and passengers. “Many clients like being in
SUVs because they are higher-up where it is easier to                    A         problem that plagues operators is finding lend-
                                                                                   ing institutions that will lend money on limou-
                                                                                   sines without charging ridiculous rates. “The


                                                                                                                                                ▲
                                         DON’T GO OVERBOARD
      ome operators struggle with the de-        Now, if you are driving for a retail              faction?

S     cision of which SUV model to pur-
      chase. You have to ask which vehi-
cle is going to make more money.
                                              client, maybe you want the top-end
                                              sedan so you can charge more money.
                                              Robert Alexander, president of RMA
                                                                                                   You don’t
                                                                                                   need to buy
                                                                                                   a new Mer-
Chances are, all SUV models will gener-       Worldwide Transportation in Rockville,               cedes to satisfy
ate the same cash flow, so it is wise to      Md., asks: “Does the general corporate               clients that would
purchase the less expensive vehicle.          client care that this is a top-of-the-line           be just as happy riding in an L-Series
Yes, a certain model may carry a trendy       Mercedes?” His answer is no. “That                   Town Car — it just doesn’t make good
brand name, but the corporate client          client will care more about the extra                business sense.
doesn’t care about the nameplate. That        money you have to charge to pay for it.”                “It’s all about finding that balance,”
person wants to know the vehicle looks           Return on investment (ROI) is what                says Alexander. “What will give you the
good, is clean, dependable, and has a         you are looking for. What is the least ex-           greatest return from your investment,
professional chauffeur. The rest is merely    pensive vehicle you can buy that will give           while providing the client the greatest
added aesthetics.                             your clients the greatest sense of satis-            sense of satisfaction?”


                                          L I M O U S I N E & C H A U F F E U R E D T R A N S P O R TAT I O N   NOVEMBER 2006              57
 S T A R T • U P        B O O T     C A M P

 How to select the right fleet vehicles
 to serve your market niche

                                                                                  cash crunch every now and then. But there are certain
                       “When approaching a                                        people who need to be put at the top of your list: banks,
                       bank, you need to look,                                    insurers, and anyone else who could have a possibility
                                                                                  of affecting your credit. You want to be sure they get
                       sound and act like a                                       paid — you don’t want to monkey around here.
                                                                                    Ron Sorci, CFO of Aventura Limousine and Trans-
                       professional business                                      portation in Miami, Fla., recently instructed new opera-
                       person.”                                                   tors attending the Limousine Start-Up Boot Camp about
                                                                                  business finance issues. The program was part of the
— SCOTT SOLOMBRINO
                                                                                  LCT Eastern Conference held at the Mohegan Sun Hotel
                                                                                  and Casino in Uncasville, Conn.
                                                                                    The advantage of using a banker that you know and
problem with banks is they want to give you an um-                                who knows you is the end result of that relationship
brella when the sun is shining,” says Robert Alexander,                           you have built. This relationship will have them treat-
president of RMA Worldwide Transportation in                                      ing you like someone they know rather than just cus-
Rockville, Md. “But when it rains, they don’t have one                            tomer #45938.
to spare.”                                                                          “An operator must know how to make a presentation
  You need to create a relationship, says Alexander.                              to a bank,” he says. “Having a solid presentation is a
Banks like deposits. If you can start doing business with                         way to convey to the bank that you know what you’re
a certain bank and create that relationship, then your                            doing.” These are standard things Sorci has learned over
chances of getting loans are better. Developing good                              the years that will allay most reservations a bank might
relationships over time are really what it is all about.                          have:
The banks need to know you and have a comfort level
with you.                                                                         1.   Two years of corporate tax returns
  Credit is everything. In the normal line of business,                           2.   Two years of personal tax returns
there is always something you are doing that will help                            3.   Internally prepared or audited financial statements
your business get credit. Paying your bills is imperative.                        4.   Current personal financial statement
Every business that is growing is going to run into a                             5.   Knowledge of credit scores (check this ahead of time



                                                       FINANCE VS. LEASE
     Understanding the benefits of both lease and financing programs can help operators determine which will work best for their situations.


  THE LEASE:                                                                      BANK FINANCING:
  Leasing companies borrow money from banks at the best possi-                    General lending institutions have the flexibility with funds that
  ble rate, then refinance it out to anyone who wants to borrow it                lease companies are just not set up for. Banks have a menu of
  again. “The logic behind this is the leasing company serves as a                items as opposed to leasing companies that most likely have
  middleman or arm to make deals happen,” says Ron Sorci, CFO                     many restrictions to purely collateralized equipment.
  of Aventura Limousine and Transportation in Miami, Fl. “They                       If an operator creates a relationship with a bank, he/she can
  then to try to help the people who don’t have the money to make                 walk in and ask for money, not only for vehicles, but also to fi-
  the purchase and don’t qualify for bank financing.”                             nance receivables. For instance, an operator is billing clients, the
     They can then charge those guys a higher interest rate and                   company is growing fast, and just can’t carry these receivables.
  the borrower is happy to pay that rate, because they are glad to                The bank will like the mixture of financing with secured vehicles
  be able to get the money they need for the vehicle they want. It                coupled with working capital, and secured with accounts receiv-
  is also a good way for an operator to establish credit.                         able.

  Leasing programs generally benefit people who:                                  The benefits of bank financing are:
  • Don’t have A-Rated credit                                                     • Lower interest rate
  • Don’t have a down-payment for a vehicle                                       • Easier exit out of the vehicle without being up-side down
  • Don’t want to deal with the typical bureaucracy                               • Able to avoid excess mileage fees
  • Want a new vehicle every couple of years                                      • Able to avoid other hidden costs usually attributed to leasing.
  • Don’t put a lot of mileage on a vehicle.                                         Sorci recommends that if you qualify for traditional bank fi-
                                                                                  nancing — go for it. If you don’t, go with the lease program and
                                                                                  use it to establish credit for the next time you need financing.


58          L I M O U S I N E & C H A U F F E U R E D T R A N S P O R TAT I O N    NOVEMBER 2006                               W W W. L C T M A G . C O M
     in case of any mistakes — so you
     can have them rectified)
6.   Insurance policies
7.   Budgets/forecasts (if available)                       SERVING THE LIVERY INDUSTRY SINCE 1981
8.   Client reference letters
9.   Credit references.                                 NATIONWIDE Funding of All...
                                                                    • Limousines                           • SUV’s
  PORTRAYING                                                        • Buses -Limo                          • Sedans
PROFESSIONALISM                                                       and Shuttle                          • New and Used
     “Loaning money is a serious issue,” says
     Scott Solombrino, president/CEO of Dav
     El Chauffeured Transportation located in
     Chelsea, Mass. “A professional image is
                                                                SEE US AT THE LIMO DIGEST SHOW
     the best way to show the banker you take
     this transaction seriously.”
        There are three things Solombrino
                                                        FOR SPECIAL RATES - BOOTH #7
     suggests operators can do to convey this
     image:
                                                                                          • A-B-C credit approvals
                                                               We Offer:                  • No-money-down programs
                                                                                          • Start-up programs
     1. You have to look the part.
     You want to look like you belong in
     the corporate world or in a bank.                   Call: (631) 531-0626 or (631) 531-0682
     Bankers tend to gravitate toward peo-               Fax: (631) 531-0684
     ple who are most like themselves —
     clean shaven, hair cuts, groomed,
     wearing a dark colored suit, with
     white or blue shirts, a tie, and shined
     shoes.


     2. Be sure all of your financial docu-
     ments are justified:
     Get them reviewed and audited by an
     outside accounting firm. This tells the
     banker your information is accurate
     and truthful. You also need to know
     this information back-to-front!                           LCT MAGAZINE’S eCLASSIFIEDS
                                                                G I V E Y O U I N S TA N T E X P O S U R E !
     3. Provide the bank with a well                                   Q u i c k . E a s y. A f f o r d a b l e .
     thought out business plan:
     Let the bank see why you need the
     loan and what you are going to do
                                                        Stretch your classified ad dollar to reach
                                                                                                               What are you
     with the money. It gives the bank
                                                        up to 20,000 potential customers with our
                                                                                                               waiting for?
     comfort to know you have thought                   red carpet treatment! Whether you have
                                                                                                            www.lctmag.com/classifieds
     things through enough to come up                   something for sale or you are looking to
     with a plan. The loan process is sim-
                                                        add to your fleet of limousines, LCT
     ple. The bank loans you money and
     wants to be sure that it gets the                  Magazine’s eClassifieds gives you the
     money back.                                        fastest response. You’ll have instant               For personal assistance in placing
                                                                                                                 your ad, please contact:
     Remember: It is your job to convince               access to buy, sell or browse anytime,
                                                                                                                  BRIDGETT BRIESE
     the bank to lend you money, not the                day or night and the opportunity to feature
                                                                                                              bridgett.briese@bobit.com
     bank’s job to just give it to you.                 your vehicle on our web site home page.
                                                                                                                (310) 533-2434

                                                L I M O U S I N E & C H A U F F E U R E D T R A N S P O R TAT I O N   NOVEMBER 2006              59

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:16
posted:3/20/2011
language:English
pages:6