The Survival Chauffeur (Part One)

Wow. It is five years since I last contributed to this chauffeur blog. In hindsight, it has taken five years to recover from the crisis that was Covid-19. We had plans to grow. Plans to diversify. Plans to chase something significant. They all went on hold while we dealt with an unprecedented situation in the travel industry. The new ‘ManchesterAirport Taxi Ltd’ never even received its first booking and DrivenByQ nosedived 90% in turnover.

I can still remember calling each member of our team and explaining the situation. We went with a strategy of last in, first out. It seemed only fair. This lasted three weeks until there was nobody left. It was then a fight for survival. Luckily, we had around £25k of outstanding payments owing to us and a looming VAT bill of another £10k. I personally took the option to defer the VAT payment. My reasoning: if we were going bust, what we owed out was irrelevant.

Ironically, by June 2020 we were cash rich. Outstanding payments were in, and we effectively recovered all our working capital. Deferring our VAT added to the capital amount and in addition, we received a £10k grant from the Government. The only caveat of the grant was that we had to (be a Limited Company and) close the business for three months. Luckily, one of our self-employed sub-contractors carried on working under his own licence. With the booking volume  so low, he was able to satisfy the tiny demand our existing customers had.

The next lifeline was the furlough scheme. Thankfully, three of us received monthly financial support. The next step was enacting something I heard ten years earlier at a networking event. Someone I respected dearly highlighted the importance of contacting a finance company if there was ever an inability to pay them. I wrote to Mercedes Benz Finance and explained our situation. They were brilliant with us and they granted a three-month payment break on two vehicles.

Thankfully, restrictions finally eased, and I was able to work again. Throughout Covid, airports surprisingly stayed open, and flights operated. The only trips allowed were essential ones. Like engineers keeping factories open or senior directors making key decisions or chemists keeping the world safe. With volumes low however, the flights were mostly from London Heathrow Airport. Thankfully, two or three of those trips each week kept DrivenByQ alive. It was eerie walking into Heathrow and being the only person there. It was like an apocalypse!

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!

Reflection Time

Every once in a while (like January), it is good to stop, reflect and review a few things. For a business to succeed, there has to be a strategy or goal so that our efforts are not wasted. I love the principle Toyota use for this of ‘Hoshin Kanri’ or True North. Hoshin Kanri is setting a compass needle and then following it to a desired destination. Having such direction is great as it keeps a team focussed, it informs everyone where they are going and it makes everyday decision making easier - all you have to ask yourself is, ‘will this help us fulfil our goal’?

So what is our goal? Well, it was set out in our original business plan many moons ago: First we wanted to create a great local company with a reputation for customer service. Second we wanted to manage it with an online booking system and then we wanted ‘growth’. That growth would utilise economies of scale - which were possible through the efficiencies created by our booking system and regional branding. So how are we doing?

Well, our ten-year-old cloud system needs a rebuild. Luckily, we have already started work on a state-of-the-art new system which comes online later this year. This time it can be sold to other companies too (so it will generate revenue).

To keep growing locally, we changed our VAT system last year so we could increase from £200k a year turnover to £1m without any more hurdles. This has already seen the employment of new staff members and the introduction of a pension scheme.

Further to this we replaced older cars with ‘brand new’ Mercedes vehicles. We also recognised that to grow regionally we needed work from a new source. To achieve this we went live with our new Manchester Airport website and had our first booking.

On reflection, despite the technicalities of specifications and regulations and legalities, we are on track. It is encouraging too when DrivenByQ keeps growing despite new customers saying they had “never heard of DrivenByQ”. Maybe that wasn’t part of our plan but at least it saved on marketing.