Bus Models and Business Models.. are NOT the same thing… an old column that seems to still relate

We called him the “Educated Idiot”. Long on education, and short on experience, Dave had stumbled into the bus business, and was planning a ski charter from Atlanta to Colorado’s High Country.

In an effort to out-muscle Mother Nature, he’d equipped his PD4106 with tank heater, oil pan heater, block heater AND the always popular battery heater. We offered him indoor parking, but he was confident his electronics would triumph, and he plugged in at the motel

While he slept, the cumulative load blew the circuit breaker, and the bus froze solid.

We all know someone like that, and for years we Real Bus Folks have laughed at them. Ours is a business where experience is king, and the business models that other industries use just don’t work for us.

It appears we’re in the middle of a Darwinian shift. It may be time to take a look at the way we’ve done business in the past, and see if it measures up to the times. Our current model may not be sustainable.

Darwin can’t be fooled or charmed… and you can’t dazzle him with footwork. He’s sneaky, too. There’s no big announcement that Darwin is coming, so you can be surrounded by his nasty Trolls, and not recognize it until it’s too late.

A partial list of things that have either changed, or become critical, would have to include the fact that our industry spends enormous amounts of money on depreciating assets that are often used seasonally.

If you don’t know what a depreciating asset is, look at your high school yearbook picture, then at a recent photo. YOU are a depreciating asset, as are your coaches. Managers in other industries would cringe at how much money we tie up in buses.

We’ve always had to do that, but in recent years resale value has become unpredictable (a charitable description). We can no longer count on bus equity as either profit, or as something we can borrow against. It’s become dangerous to buy a coach to seize a short term opportunity.

The public is convinced that a 5 year old bus is obsolescent (with more of that coming since seat belts and electronic gizmos are mandated in new coaches), yet we can only afford coaches if they last 20 years. New coach prices keep climbing due to inflation and government mandates. Manufacturers seem determined to sell them for at least a little more than it costs to build them.

Revenue is static, we can’t seem to convince the public of what a coach trip is worth. In many cases, even if there was no coachly competition, you still couldn’t raise prices to a level that covers costs and the huge risks you take, while providing a reasonable profit. Folks either would not go, or would take cars.

What to do? Heck if I know, but a couple of things seem wise.

First we need to look at other industries. Don’t mimic them, but learn from their experience. In the future, our business is likely to be more like theirs.

See about taking business classes. Check out what’s available in your area, and take advantage of it. Try looking at the bus business through the eyes of folks who’ve been successful in other disciplines. Compare your numbers and ratios with other types of businesses; we’re more like them than we’d like to admit.

Watch your peers (and competitors). Learn from them… try new things, and then be brutally honest with yourself about what works and what doesn’t… remember Darwin is lurking.

One problem you’ve got is the fact that, no matter how smart you are, some competitors are dingbats who run too cheap. If you can hang on, Darwin will squish them. A combination of tight money, and government regulation may help them remain road kill. It’s a delicate balancing act

It would be nice if I could offer ideas that would help. I ain’t that smart, and if a formula worked, every business would succeed. Try stuff, and try to keep ego out of decisions.

Look at your resources, and the talents of your employees, and see if there are additional things you can be doing with them. The future belongs to companies that do more than one thing well. It’s all about utilization.

In the end, we’re likely to have a smaller, smarter, industry. The survivors are going to be the ones who adapted, used resources wisely, and learned from other business models. I’m not saying I LIKE that, just that Darwin is merciless. Dinosaurs were big, mammals small and clever. Who won????

Folks, it seems like we only have 2 choices. We can be a shivering dinosaur waiting hopefully for warm weather, or the furry mammal scurrying around looking for new ways to eat and keep warm.