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You asked for it and we listened. In this column, we ask operators of all sizes and from all walks of the industry a question about their business and report their answers so you can assess how your own company compares to your peers. If you would like to participate, please email Rob Smentek at rob@chauffeurdriven.com for next issue’s question.
TOPIC: How did you manage to keep cash on hand during the COVID pandemic? Did you find any “hidden cash”?
Fortunately, 2019 and the first two and a half months of 2020 were great. Of course, that seemed to be universal throughout the industry. When the pandemic hit, I did take advantage of loan deferment on our cars. To save money, I also wore all the hats within the company to survive. Without the PPP, it would have been next to impossible to go on eight to 10 months at 20 perfect efficiency. But, I am good at squeezing the nickel ‘til the buffalo *ahem* s--ts'— a little humor for the times.
Gary Arndt, President
A Limousine Service in Pittsburgh, Pa.
My wife is old-school Italian so I went under our mattress and found $600.
Jason Dornhoffer, Co-founder
United Private Car in Boston, Mass.
Our vendors were our first and best source of cash control. Asking our lenders and vendors to delay or defer payments helped us conserve cash until we could sort out the different grants and loans that were available to us. Once we secured from lenders such as Dedicated Funding and FFI, we talked to local vendors about delaying. Chosen Payments and other vendors came out immediately with some level of support by reducing fees temporarily. We were also fortunate to have an SBA loan, which allowed us to get six months of loan payments forgiven. That was huge. The final part was pushing large institutional clients to pay outstanding receivables. We reduced our A/R to almost zero by working hard to get outstanding invoices paid.
Sean Duval, President & CEO
Golden Limousine in Ann Arbor, Mich.
For our survival, we asked for all of our credit statements. Once we had them, we began to renegotiate all the payments. First, we addressed the payments that had a deadline coming. Those payments we couldn´t renegotiate in the first month were authorized by the third. Also, we requested a personal credit to finish our payment with a few of our cars, but sold others from our fleet. To free up some cash, we canceled some cell phone plans and additional credit cards.
Agustin Hernandez, Owner
Blackcar Offers Limo Services in Mexico City, Mexico
We cancelled our limousine insurance as soon as reservations started cancelling. After what would have been an amazing March, getting the refund was helpful. We managed a workers' comp insurance refund too. We also have two rental properties and some lease vehicles. I used the advice of a my former professor who warned against keeping all your eggs in one basket. We also have a used car lot and had record sales in June. Every little bit helps!
We have been blessed that we are in a "low virus" area and have had income from limousines since the end of June, not the whole fleet but one or two. It’s been enough to cover insurance/maintenance and keep the vehicles on the road and visible. PPP helped greatly during May and June and the EIDL is in savings in case we need it later—like November and December.
Karen Lotts, Owner
A Knight Rider Limousine Service in Cadott, Wisc.
Sock drawer. Underwear drawer. Shoe box. Under rugs. Oh ... not that kind of money!
We simply slashed expenses, hard and to the bone. We made sure we weren’t spending what wasn’t absolutely critical. Unfortunately, we had to furlough most of the team. Most important were our cash reserves—the money that’s never touched, unless there’s an emergency. This counts as an emergency. Thankfully, it’s still sitting there, and we’re being conscious of every penny coming and going. So far, we’re keeping our heads above water, and staying on track. I’m proud of us.
A wise woman once told me: Have enough cash reserves to get through six months with no revenue. (Yes, it was you Andi Gray [of Strategy Leaders].) Guess what? She was right, and not nearly as nuts as I thought she was at the time. Hidden cash is like pennies from heaven. Proper advance planning and putting money away before we needed it was the smartest thing we can do. I’m very thankful that I listened.
Tracy Salinger, President and CEO
Unique Limousine in Harrisburg, Pa.
We’ve loved hearing your answers to our benchmarking questions—but we always welcome suggestions for future topics, too!
Send an email to rob@chauffeurdriven.com you just might see your query answered in our next E-News.
[10.14.20]
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New for 2021 model year, the Ford Transit is updated with livery, parcel delivery, and recreational vehicle option packages to meet the changing needs of operators and the traveling public.
“With many Americans working from home and practicing social distancing during the pandemic, the popularity of recreational vehicles has soared at the same time package delivery has seen incredible growth,” says Tiffany Chang, Ford fleet brand strategy manager. “Our new 2021 Transit options help people design the recreational vehicles of their dreams and help enable our commercial customers to more efficiently deliver goods and services across the country.”
2021 Ford Transit passenger van
Transit Vans for Work: Parcel Delivery and Livery
The Livery Package serves the premium transportation market with a ready-made configuration focused on comfort and style. Available for Transit passenger van XLT, the package includes 10-way power seats finished in Ebony leather for all passengers, power-sliding side door, HID headlamps, full privacy glass, and 16-inch silver wheels with exposed lug nuts with black front wheel well liners for both single- and dual-rear-wheel models. Other standard appearance features include body-colored bumpers and chrome grille. The full suite of Ford Co-Pilot 360 Technology is standard on these vans, including Pre-Collision Assist with Automatic Emergency Braking, Blind Spot Information System, Lane-Keeping System, Auto High-Beam Headlamps, reverse and side sensing, and rearview camera with trailer hitch assist.
A new Parcel Delivery Package focuses on the needs of an industry seeing incredible growth. It starts with a number of design refinements standard for the 2021 Transit that provide improved access to the cargo compartment. The manual parking brake on the floor by the driver’s seat has been replaced in all Transit vans up to 9,500 pounds GVWR by an electronic parking brake, creating a 50 percent wider aisle that is clear between the front seats.
An optional center console with right-side shifter further improves walkthrough and offers more than 7 inches of additional driver legroom. The overhead shelf is now optional, providing more clearance when standing. The Parcel Delivery Package adds 50/50 hinged rear doors featuring a wide 253-degree opening and full interior lighting. The armrests have been eliminated from both the driver and passenger seats to further improve cargo access.
Transit Vans for Play: Motorhomes, RVs, and Adventure Vans
July RV shipments were the highest in 40 years at 43,035 units, and 46 million Americans say they plan to take an RV trip in the next 12 months, according to the RV Industry Association.
More than half of all motorhomes sold in the United States are built on Ford chassis. Ford is using its expertise and responding to growing demand with appearance updates for the 2021 Transit, including new wheel choices and three new exterior colors that keep their good looks even when covered in campsite dirt. Three new and improved option packages include the updated Transit Motorhome Prep Package for cutaway, the new RV Prep Package for cargo van and a new Adventure Prep Package for cargo or crew van.
A honeycomb mesh grille is standard on all 2021 Transit models. Production begins this fall at Kansas City Assembly Plant in Claycomo, Mo.
Visit corporate.ford.com for more information.
[10.13.20]
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It’s another mixed bag this week for the next stimulus/aid package as politics is getting real fewer than four weeks from Election Day. It’s a showdown between House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell. With the added wrinkle of President Donald Trump weighing in via Twitter in a confusing back and forth to first pledge his support for a relief bill, then tabling it until after the election, then walking it back and pushing for an even larger bill (which, according to McConnell, has zero support from Senate Republicans), it’s been a roller-coaster kind of week. Do we expect anything less in 2020?
Update 10/13: Senate Majority Leader McConnell indicated that they would vote sometime this month once the full chamber returns on 10/23 on a limited stimulus package that would include new funding for the Paycheck Protection Program (PPP), as well as unemployment benefits. Over the weekend, Treasury Secretary Steven Mnuchin offered up a $1.8T package to House Speaker Pelosi, which was dismissed because "the Trump proposal falls significantly short of what this pandemic and deep recession demand," according to the Speaker. President Trump has been tweeting on the issue again, today posting "Go big or go home!!!"
Frustrating for sure, but it’s so important not to lose hope or take your foot off the gas regarding Congressional outreach. The major national associations—among them the National Limousine Association (NLA), Global Business Travel Association (GBTA), American Bus Association (ABA), United Motorcoach Association (UMA), and The Transportation Alliance, to name a few—have all been working hard behind the scenes to advocate for our industries, whether it’s chauffeured ground transportation, travel and tourism, or corporate travel. We’re all connected, and our place in the overall global travel network requires that we all have the support of our government. Your voice can make a difference by continuing to contact your representatives. Remember: The presidential race dominates headlines, but every House seat is up for reelection, as are 33 Senate seats. Are you satisfied with the job they are doing during one of the worst crises of our lifetime? Only you can answer that with your vote.
Among the larger bills are the Coronavirus Economic Relief for Transportation Services (CERTS Act), a version of which is currently floating around in the House (H.R.7642) AND Senate (S.4150) with broad bipartisan support for both by senior leadership. All in all, it has more than 300 cosponsors—nearly 60 percent of Congress.
However, CERTS was designed to be attached to a larger bill, not to pass as a standalone, and it desperately seeks that bigger legislation.
Broadly across the industry, another round of PPP, among other loans and grants, is sorely needed until the pandemic is under control for small businesses. That too has strong support, but is being buried by other sticking points.
Even if you’ve already reached out to your representatives, do so again. Call, email, or request a meeting. It’s critical they see that there are hundreds of thousands of jobs on the line, and without a strong and healthy travel sector, the economy cannot fully recover.
To find your representative, click here. Busesmoveamerica.com also has form letters available to exert your support for the CERTS Act.
Don’t give up hope. Fight on. Your voice is powerful.
[10.09.20]