Founding a coach operator in the current climate is not for the faint of heart. Group 10 Executive Coaches is a new kid on the block, but it will hit the ground running thanks to careful preparation
Launching a new business in the coach industry requires nous and knowledge if there is to be a chance of success. Doing so with new vehicles from the start calls for an even stronger grasp of how the sector works.
Duane Halliwell and Rikki Wilson both have exactly that. They formed Group 10 Executive Coaches in January, and it did its first job in April.
The duo from the north east have pooled their experience in minicoaches and coaches respectively to formulate a roadmap for the business. In compiling that five-year plan, they have allowed for money to be spent where it is appropriate, but not where it isn’t.
Vehicles are an area where, thanks to the support of Stoke Park Finance, they have made a statement. The opening fleet consists of a 55-seat Neoplan Tourliner P20, and a 25-seat Ferqui Sunrise-bodied Iveco Daily supplied by Connaught PSV.
The Group 10 brand, while not the work of an expensive design studio, is already cherished. It was created by Duane and Rikki after a lot of hard work and teeth-gnashing before they settled on a distinctive ball-style logo.
Rikki talks about the brand a lot. It is key to Group 10’s future, and he and Duane are adamant that it must be protected. But first, it has to be established and customers’ trust won. All of that and more has been considered during planning. Now, the talking is over and it is time for Group 10 to deliver a return on the two partners’ investment.
Experienced heads
Duane, 49, has experience of small PCVs through his business, Prestige Executive Travel of Newcastle-upon-Tyne. Rikki, although just 29, started his career with a bus operator in the area and he was most recently Operations Manager for a seven-vehicle coach fleet.
“There, I started everything from scratch. When I joined, a single minibus was all we had. I grew that to seven coaches that were all purchased new. The owners gave me a blank canvas to do as I saw best,” says Rikki.
At that company, he had the authority to run it almost as his own, but without the responsibility of ownership. So why did he abandon the safety net of working for someone else and pool resources with Duane to go it on their own?
“I like to see coaches polished and kept spotless. As the operation grew, it became difficult to find drivers who would do that,” he says, coming back to the importance of a brand.
“But I had an interest in coaches, and having my own business was something that I’d always wanted. When you know the industry and enjoy working within it, why wouldn’t you want to have your own operation?”
Duane’s business has changed as a result of Group 10’s formation. While some of Prestige’s work is contracts, among its fleet was a high-specification minicoach. That was traded in against the Ferqui, and the work that it did has been transferred to Group 10.
Starting to go on
The Ferqui will largely service private hire, but the Neoplan is used on contracts for a variety of premium tour operators. Their requirements in relation to vehicle age were among the reasons for going with new, but there are others besides.
“We would rather take the risk up-front by financing new vehicles than be exposed to it later should we suffer mechanical problems on older coaches,” says Rikki. “If we buy brand new, they are covered under warranty. Between Ferqui, Iveco and MAN they vary in terms of what we get, but we know that the initial investment is safe. We’re 99% sure that we won’t be hit with expensive repair bills.”
Tour work – much of it involving London – ensures that the Neoplan will be kept busy, spreading finance payments over as many days’ utilisation as possible. “I’ve seen other operators take a view on corporate work over tours,” says Rikki. “They see a day’s corporate hire at a very good return; it may be an excellent profit margin and significantly higher than a tour will deliver.
“But they forget that the coach may spend time parked between hires. One on tour will not. Desperation can then drag the value of coach hire down. If you cut the rate for one job, you have no chance of getting it back to where it needs to be next time.”
The other risk with a small fleet is the failure of an older vehicle. Where there is no slack to cover, that can become expensive. Additionally, the first year of Group 10 is all about creating the brand, and there can be little better way of doing that than by using new coaches.
“It’s nice to have a vehicle that is fully paid-for and earning good money. I have been in that position before, but older stock can cost a lot to keep on the road. Couple that to the impression created and there is a definite value to having a new coach,” says Duane.
MAN’s dealership at Gateshead looks after both vehicles under contract. Rikki’s experience with the branch in the past demonstrated that it is in touch with coach operators’ needs, and Group 10 is happy to entrust maintenance to it.
Brand is king
The brand was designed within six weeks. Centrepiece is the ball, while the Tourliner also carries a distinctive V-shaped carbon fibre-effect vinyl between the axles.
The latter was designed to sit well with the Neoplan’s distinctive B-pillar. Application was by Acomb Signs in York, and the effect has proved to be popular in the short time that the Tourliner has been in service. The vinyl may be refreshed when required if it weathers.
The Ferqui-bodied Iveco is the first to its configuration. It has 25 seats within a shell that can accommodate 33, and it is so far the only Sunrise finished in metallic paint. The discreet, almost graphite grey effect was specified by Duane and Rikki.
Key to building any brand is ensuring that customers know about it. Advertising has, as yet, proved to be unnecessary; the Tourliner had four months’ work booked from the get-go and the Iveco is also busy, partially thanks to the Prestige Executive Travel connection. “So far we haven’t spent a penny on advertising or logo creation. But come year two, we will start to promote ourselves. We’ve both got lots of industry contacts,” says Duane.
Business planning
Everything within Group 10’s first five years is planned, and it was that level of organisation that sufficiently impressed Stoke Park Finance for it to place the finance for the vehicles.
“We have the demand for a second Tourliner already,” says Duane, who adds that a build slot in the Ankara factory has been secured for 2019. That coach will be used both on tour work and on corporate hires, allowing the business to develop into the latter area with a full-size vehicle.
“But our plan for the first year is quite simple. Both of us will do the work, along with a handful of drivers that we trust. We will spend that time establishing the brand, and grow from there,” says Rikki
Group 10 is not a vehicle to get rich quick for Duane and Rikki. Alongside furthering the all-important brand, the first year’s target is to become debt-free, bar vehicle finance. That, adds Rikki, is something that the business is already on target to achieve.
Financial sensibility extends to parking. Vehicles are based at Stanley Travel’s premises in County Durham, and Group 10 does not have an office to pay for; instead, administration is done on the move or from home. In the long-term, premises are planned.
“If we’re debt-free at the end of year one, we then have a company that is worth something,” says Rikki. “Our intention is not to drive the latest BMW or wear £500 pairs of shoes by having the business sustain that.
“We want to build something for the future that will deliver a comfortable standard of living and will also benefit our children and grandchildren.
“We know where we need to be in three years’ time, and where we want to get to in five. And that is to have a brand that our customers can recognise and trust.”
