Group 10 Executive Coaches commenced operations on 1 May 2018. It wasn’t established in the traditional way, and instead it trod its own path. How has the first year gone?
Establishing a coach operation in a climate of emission control zones, pressure on rates and myriad other hurdles is a brave move. But it’s what Duane Halliwell and Rikki Wilson did a year ago. Group 10 Executive Coaches went live on 1 May 2018.
Neither man was new to the industry. Duane gained experience with his minicoach business in Newcastle, and Rikki had done similar, accruing time running a modestly sized operation in the same area.
That stood them in good stead, but launching Group 10 still represented a challenge. Its strategy from the beginning was clear: It would take only new coaches into its fleet, allowing costs to be predicted accurately, and it would focus on tour work.
What of that first year? There were hurdles to overcome, as would be expected. Regardless of how long an operator has been established, there is no way to mitigate damage to a coach or unplanned time spent off the road.
Like most in the industry, Group 10 experienced a slow winter season. That was hard, says Rikki, but it was predicted. Nevertheless, the targets that they had set for the business’s first year were achieved. That leaves them in a positive place as they look towards the future.
Forming relationships
Group 10’s plan was always to launch ahead of 2018’s summer season. Had it not proved possible to have done that, Duane and Rikki would have postponed until 2019.
From the outset, they were clear about one thing: That they had no intention of forming a business that would undermine others by engaging in a price war. “That is a problem across the industry. It benefits nobody in the long run,” says Rikki. “You end up killing your own business, and potentially that of the operator you’ve taken the work from.”
Trying to put tour contracts in place before procuring coaches to run them with proved to be a ‘chicken and egg’ scenario, but Rikki’s history with his previous employer held good sway with tour companies and finance businesses.
“Although I didn’t have a relationship with some tour operators, I had the benefit of being able to tell them that I’d undertaken similar work previously. If you can give the right answers, they are always happy to deal with operators that are new to them.”
New coaches are key to tour work. Rikki and Duane knew that such a strategy would seldom gel with ad-hoc private hire duties; there, the operator with an older coach and costs to match will often win, although when odd free days are in the schedule between tours, a constructive view can be taken.
Budgeting challenges
The hardest part of running a young business is budgeting. Predicting the week’s fuel bill is difficult, and no account can be taken of a driver damaging a coach, a puncture or a broken windscreen.
Group 10 has been blessed by a strong group of drivers. None have left the company since it was formed. But odd scuffs and knocks happen, and its approach to compliance and presentation means that rectification takes place immediately.
“Customers may not be able to see the damage, but I want the coach repaired before it does anything else. If you leave a knock unrectified, it’s asking for others.
“I have paid other operators to cover work, and covered hundreds of miles myself, to release a coach for repair. Budgeting for that is impossible. We can’t form an idea of what our costs will be for the month other than fixed items. That’s the most difficult part.”
Vehicle policy
Group 10’s fleet is currently at what Rikki describes as “a comfortable level”. It has four tour coaches – all Neoplan Tourliners – along with a 25-seat Ferqui-bodied Iveco, a 16-seat Mercedes-Benz Sprinter converted by EVM, a Ford Transit, and a Neoplan Starliner.
One of the Tourliners was nearly new when it arrived – a deal that was impossible to turn down being the reason that one resolution was broken – and the Starliner was purchased in corporate format. The remainder joined new and all are looked after by MAN’s Gateshead dealership.
By anyone’s standards, that’s not a conventional way to establish a coach business. But there’s a reason behind why it was done that way.
“Some operators have a base of work in school contracts, which can utilise older coaches. Then they have private hire, and then they have tour work, which justifies new vehicles. They have three lines of income. We don’t have that. We want to concentrate on tours.”
Initially, Group 10 shared parking with another operator. That worked well enough, but it moved out recently. The reasons for leaving were two-fold; it reduced dead mileage to and from Newcastle, and it mitigated any concerns from the landlord of Group 10 muscling in on its work.
“Being in a competitor’s yard restricts what we can do as a business. We don’t necessarily want others knowing what we’re up to, and nor should we know what they are doing. That’s the fairest way to look at it,” says Rikki.
Dealership delights
Use of MAN at Gateshead as maintenance provider is a clever strategy when it is examined closely. Relations are helped by a positive attitude from the dealer.
“We have a warranty package on most coaches, but otherwise we pay for work as we go. We don’t have repair and maintenance. Because MAN Truck and Bus UK is our named provider, that allows us to use all its service centres. We usually bring vehicles back to Gateshead for inspection, but if it is more convenient to have the task carried out elsewhere, we can arrange that, which is helpful during busy periods.”
A major benefit of using MAN at Gateshead is that if any issues are identified during inspection, they can be fixed there and then on the Neoplans. That minimises time off the road, and it also prevents any risk of voiding warranty coverage.
Pushing onwards
Tour contracts are secure for the foreseeable future, but Rikki’s aspiration is for Group 10 to eventually operate a programme of its own. That’s a long-term goal, although it would not displace all contracted work.
Combining a plateau of tours, corporate jobs and private hire is an ideal situation. But corporate work is difficult; work is not consistent, and a base of other duties was required to justify the purchase of the Starliner. Our bread and butter work – tours – is effectively some other operators’ gravy. We’ve gone about setting ourselves up in a backward way, you could perhaps say.”
Another small operator in the Newcastle area serves as a template that Rikki seeks to emulate – but not copy. It has work that is as certain as anything in the coach industry can be, and that is complemented by its own tours and private hires.
“We don’t want to be a huge business, but we do want to stand on our own two feet. We want to do that ourselves and without being a threat to other operators.”
Playing the long game
Neither Duane nor Rikki are in coaching for the short term. Maintaining a modern fleet is key to Group 10’s business plan, but in terms of work, several options are on the table.
Given the chance, would Rikki have done anything differently? It’s unlikely, but if he was advising another budding young operator, he would suggest that sticking with one coach for the first year and do as much for themselves would be the optimum plan of action.
Year one for Group 10 was a period of putting everything in place, forming the business into an entity that is feasible and profitable to take forwards. It included a busy summer and a slower winter, things that will be familiar to most operators.
Not everything was easy. One coach let the side down and was off the road during a busy period, and Brexit is an ongoing concern. It may make working into mainland Europe less attractive, and some operators will inevitably reallocate coaches to domestic work, potentially putting pressure on rates.
“Year two is about lying in the bed we have made,” says Rikki. “We have to maintain a high standard. One of our coaches is the only example in the UK to carry a certain tour operator’s livery. A lot of money has gone into that, which the supplier recognises. If we don’t meet its standard, we’re left with a coach that’s useless until it’s repainted.
“Year one is the risk. Year two is the challenge.”