The Crisis Chauffeur

No sooner had I published ‘How to be an airport transfer specialist’ the world went in to quarantine and all the airport bookings disappeared. New reservations dried up, cancellations flooded in and work simply stopped. There was something on the news about a virus back in December. It was in China but that was miles away. Like many people, I just didn’t make the connection. The SARS Virus from 2002 spread to other countries but it never really affected the UK. For all I knew, this was probably going to be the same.

With the current COVID-19 virus declared a global pandemic, it is an unprecedented time. As an airport transfer provider for business customers, we are now at a standstill. Business passengers have been instructed by their employers, not to travel. The United States has blocked flights from Europe. The risk of spreading the contagious outbreak from one nation to another is becoming a reality. Likewise, airports have witnessed massive reductions in passenger numbers. Since the start of March, most bookings we completed were to repatriate people with numbers declining all the time.

It is a volatile world we live in and things change all the time. Occasionally, something affects the travel industry on a very large scale. Sometimes you are behind the curve and other times you are at the cutting edge of what happens in the wider economy. After twenty years in the travel industry I have seen different things. The recession of 2008/9 was probably the first crisis Iencountered. It had a detrimental effect for DrivenByQ, but it was relatively short lived. Most companies cut back on their travel but luckily a few customers went into overdrive.

Just as we were recovering from the effect of the Global financial crisis, a volcano in Iceland erupted in 2010. The ash cloud it created blocked the airspace of Europe with its fine particles which could damage a jet engine. It was initially very concerning. I still remember seeing job after job being cancelled in just a matter of hours. Luckily, people could still travel but, just not by air. As a ground transportation provider, we suddenly boomed. We had some fantastic long-distance bookings. One of which went as far as Spain.

If anything, experience has taught me not to panic. Something usually comes along and makes up for the financial losses encountered. Luckily in the current environment, DrivenByQ has a mix of work which is mostly paid on account. This means, despite zero future bookings there should be money coming in for the next two months. Eventually it might run out, but it buys some time to formulate a plan. In addition, as we are a VAT registered company and submitting monthly figures to both HMRC and PAYE, any claim for assistance is verified.

For drivers who are self-employed and dealing mostly in the cash market, I worry for their future. The COVID-19 outbreak has been rapidly detrimental for their livelihood. It is different to anything before. This is because there is little opportunity to find an alternative income source as the crisis persists. While the country is in lock-down, people are advised to stay at home. On top of this, any financial assistance from the government will be based on annual profits rather than costs. That means anyone who purchased a vehicle or re-invested in their business could be penalised.

I guess we will just have to wait and see how things develop in the months ahead?

A Qualified Chauffeur

A couple of weeks ago I travelled to Liverpool for an assessment with the Guild of Professional Chauffeurs in the hope of becoming a qualified Chauffeur. Gladly I passed and am now a member of the Guild. Initially I was unsure of joining but that changed a few weeks ago. The Guild of Professional Chauffeurs is a fairly new movement in the chauffeur industry - it only carried out its first assessment in 2018. Initially the uptake was slow. Although I was aware of the efforts to grow the membership, I was probably similar to many people who were waiting to see if it gained momentum.

As an effort to dispel the myths of it being a cloak and dagger type organisation the Guild held an open meeting in Walsall. They wanted to reassure potential members there was a recognised procedure for assessment and everything was above board. As an opportunity to meet other operators in the Chauffeur Industry and network, I went along. It was good to talk to so many like-minded people and share experiences. It gave me the confidence needed to believe the Guild would be more than just a member’s directory. A lot of time and effort had been invested in establishing the organisation as a professional body.

The Guild of Professional Chauffeurs (or GoPC for short) needed members to join if it was really going to get the ball rolling. It was time for people to sign-up and become a qualified Chauffeur. All the hard work had been done by the committee. What it required now was for those wait-and-see type people to undergo assessment. It would then become their Guild and grow with their requirements. Anyone with vision will see the potential for the Guild to become an industry body and represent the niche market of the chauffeur world. The capability exists in its members to help each other with licensing issues, vehicle purchasing questions, discounted insurance schemes and a whole lot more.

As someone who has always believed ‘one man can make a difference’, it was time to stand up and be counted. Luckily in 2019, I had already completed a one day first-aid course with the Guild. This meant all I had to do was complete a practical assessment and a written Highway Code test. Obviously you have to send over some documents, just to ensure your vehicle is licensed and legal but this can be done in advance. On the day, it is truly nerve-racking! Being assessed by your peers is quite something. However, I simply took the approach that, if I was lacking in any department, there would be constructive feedback and a second opportunity to attempt the assessment at a later date.

True to their word in Walsall, if you carry out a chauffeuring role on a daily basis (and you are working to a good standard), there is every likelihood you will achieve success. Gladly, my advanced driver training with RoSPA was noted and it made a difference. This was praised by my assessor. The feedback was all positive (apart from a minor setback on the practical test). To end the day, a lapel badge was pinned to my suit and a certificate was dispatched in the post. Now I proudly have something to differentiate my skills from anyone branding themselves a Chauffeur. I have been assessed by my peers and approved as a Qualified Chauffeur.

The Specific Chauffeur

Last weekend I attended a meeting for the Guild of Professional Chauffeurs in Walsall. It was a great event with a variety of people. Some were looking to set up a new chauffeur business and others were well established in the chauffeur world.

Over a few beers at the bar I spoke to a mixture of people in the trade. One was an experienced and professional chauffeur who was employed to drive for an organization. He was looking to start up on his own but was unsure where to divert his efforts. One of the experienced guys was explaining to him that you cannot be all things to all people. It was better to focus on a specific area. My contribution was the Richard Branson philosophy of ‘finding the niche in the overcrowded market’.

I spoke to another individual who setup two years ago and was growing in the corporate sector. The way he did this was to use LinkedIn. He had spent considerable time and money on employing a specialist who showed him a way to structure his connections and content. This enabled him to constantly be in the forefront of people’s minds. Rather than adopting the hard-sell he simply wanted to be considered until the time was right for someone to reach out to him.

I know from experience that someone can take a business card and keep hold of it until they require a chauffeur driven car service. It might be the next week or it might be ten years later. Either way, if they call you, the way you represented your company must have made the right impression. The only thing is, if you need to pay the bills, the model you adopt and the market you chase must be capable of sustaining you. In North Wales where DrivenByQ is based you can guarantee someone new will enter the trade every few years with a specific (but somewhat doomed) objective.

For some reason, new entrants to the North Wales chauffeur market have a belief that there is an overwhelming demand for golfing trips with groups of wealthy individuals. Having been in the trade for almost twenty years now, it is a specific customer that I am yet to see materialise. Despite this, you can guarantee there will be another new start-up who will chase this market. My advice to them is stop! Don’t do it. Unless you know specifically that there is a demand for a service, simply don’t go anywhere near it.

Only last week I spoke to someone in his fifties who had retired and was looking to set up tours or something enjoyable. We spoke for a little while and I could hear the enthusiasm in his voice and romance which accompanied it. We then went through what is required to get up and running. Firstly the licensing aspect would cost around £1,000. Next the insurance would be around £3,000. Then there was the vehicle which would need to be at least £15,000. This was before road tax, fuel, repairs, servicing and the unquantified and ongoing marketing costs.

In that situation I felt ambivalent. On one hand you are crushing someone’s dreams. On the other hand you are giving them a reality check. In the long run, it would be much better to spend £20,000 on something which will give you a return. Better still, why not spend it on yourself, doing something you enjoy? Take a holiday or a cruise or buy a caravan or even a boat. I can also guarantee that if you have a partner who is also retired, they would appreciate your nest egg giving you both some joy and quality time together.

So what is my advice to someone thinking of starting a chauffeur company in this day and age? Well, firstly, ask yourself how you are going to make profit – not just turnover. Ask yourself what sort of a margin you can produce and then ask yourself, is it sustainable and can you grow it? Can you do it twelve months of the year and how much of your time will it demand? On top of this, ask yourself what you would do if you had two bookings at the same time or what you would do if your vehicle was off the road at short notice. Can you provide a back-up?

When you speak to some people who have been in the chauffeur trade for a while they can be a bit downbeat or even a bit grumpy. That is because they have adapted their life around their business and it has cost them valuable time and money. In reality what they really wanted was a lifestyle they could adapt their business around. It takes time to build a chauffeur business and it takes time to build something capable of producing a regular wage. For many people, the time it takes to figure it all out is costly and the return on their investment is lengthy.

My advice therefore is simple. Do your research. Compile a list of your costs and be generous on what you expect to pay out (in fact, double it). Then do some projections and be conservative on what you expect to earn. The next bit is what it will cost in time (not just money) to work ON your business as well as IN your business. Then decide whether it is profitable in the short, medium and long term. If, after all this you can still make money, have fun and take time off to enjoy life, go for it. I can guarantee, it will definitely be an adventure. Just don’t expect it to work overnight. After all, if it was that easy, we would all be doing it!

Time To Split

For some time now, I have been increasingly concerned that this Chauffeur Blog is conflicting. For anyone who has been reading will know, I am growing an established business while also growing a new one.

There is some crossover but the two companies serve different markets and different sectors, they are at different stages of development too and even have different marketing plans. It might be better to keep the themes running side by side?

From this point of view I have decided it would be better to write two separate Blogs. One for each company. I also think it would be better if the Blogs were actually on the websites of the companies they represent.

What I haven’t decided is if I should still keep this Blog as an overview of the other two? Either way, you can now find the two Blogs on their relevant websites by following the links below:

Manchester Airport Chauffeur Blog

DrivenByQ Chauffeur Blog

Turbo Lag

Standing outside a hotel, I’m waiting for a group to finish their meal when the first passenger comes out and strikes up a conversation. We talk about the economy, Brexit and how his business is doing. I drop in to the conversation that DrivenByQ have just had twenty-four months of continuous growth. He says that is impressive in the current climate.

Our figures for 2018 reflect a 30% growth in turnover. We brought in new drivers, bought new vehicles and improved our processes. It all sounds good - and it is! There is just one small thing to note though. Our profitability remained the same. The reason? We had to change our accounting method (a conundrum I previously wrote about).

As the turnover grew we were forced to abandon one VAT scheme and adopt another. At the threshold of £230,000 we could no longer use the flat rate scheme. Instead we had to use a traditional scheme. The difference meant claiming back VAT on purchases rather than retaining a generous portion of VAT on invoices as we previously did.

Purchasing vehicles and taking on an employee was the first step toward making the new scheme work for us. The reality however is that we are still in a transitional phase. I’m sure most companies go through stages where their business model changes and sometimes, you don’t really know the effect of that change until after the event.

So in order to generate more profit we have two options: The first (and easiest) is to reduce our turnover and go back to the previous scheme. The second is to grow our turnover, purchase more vehicles as a company and take on more employees. I will let you decide which one you think we are actively working toward.