Counting the cost
Page 25
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HUNCH, guestimation and the unquestioning rel. lpetition of traditional methods are all losing credibility as ways of controlling a business. Rightly so. There are activities where an element of hunch can still produce success but it can also produce dreadful failures, which one hears less about. The pertinent question for a businessman to ask about a hunch is: will the bank manager lend money on it?
Everything in our highly regulated society, and especially in the regulation-burdened transport field, is tending to force rational, methodical practices on to all operators, regardless of size and traffic. There are, of course, many who need no such prodding and there are some (like the operator dealt with this week on page 55) who are extending the frontiers of management control in transport.
Some may think that this computerized provision of weekly cost and profitability records is over-elaborate and unnecessarily sophisticated. But how many hauliers or C-licensees can put their hands on their hearts and say exactly how each of their vehicles operated financially in the previous week? Plugging a profit drain can be as worth while as shifting new traffic. At the other end of the scale, this week's Advice on Transport Problems feature is suggesting the first very practical steps in setting up a recording system for the small—but growing—operator. We suspect that when many hauliers embarrassed the RHA by failing to provide the costings requested by the PIB, it was simply because most of them had no business records. (And where are those "guinea pigs" for the promised RHA/PIB rates rise exercise?) Economic and other national and international pressures have now been joined by the statutory requirement to keep records of vehicle maintenance and will perhaps soon be accompanied by the fitting of tachographs to trace a vehicle's daily progress. The latter offers operators a long overdue means of keeping track of costs: they can begin to see more clearly what they are getting for the wages they pay out.
It all adds up to the fact that it is good businesssense to monitor and analyse income and expenditure. This may look blindingly obvious; and so it is, to all except those who cannot count the cost of not doing it, simply because they never count the costs!