EUROPE gives a WARM WELCOME The amazing Worldmaster'. . achieving the ultimate to the
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ROYAL TIGER
1270:MgEASILO
in bus design for years to come.. . has made an instant appeal to European operators. Now operating in most countries in a line from northern Norway to southern Spain (Denmark alone has ordered the best part of 150), the Worldmaster has proved itself the most successful large-capacity bus of today. The powerful 150 h.p. underfloor diesel unit has power and to spare for the steepest mountain passes on an astonishingly low fuel consumption basis. Pneumo-cyclic gearbox and 2-pedal control introduces an undreamt-of high standard in safety and driving simplicity. Advanced air, oil and fuel filtration reduces wear and adds years to an already high expectation of life. In short, the Worldmaster ' drives better, pulls better and rides better at far less cost per passenger mile.
What is that? "
"Travelling expenses."
"But Fm not going to have any. How can 1?"
You are going to have quite a lot of travelling expenses. How do you think you are going to get business? Certainly not by sitting at home and waiting for it."
" No, but I thought of advertising a little."
" Oh, yes, you'll certainly have to advertise, but far more important is the method of personal canvass. Even if you rely, in the main, on advertising, you will have replies to your advertisements and it is 10 to one that some will take the form of a request that you should call and discuss the matter.
"Your best plan in such a case will be to jump in your lorry, supposing that it is, unfortunately, available, run out to the inquirer, discuss the matter with him and take the opportunity to show him the vehicle you propose to Use for his job. Maybe in that way you can clinch the matter and get the order. But you aren't going to be able to do that at no cost to yourself.",
"1 low can it cost me anything? I have my own vehicle to run about in."
"But, goodness gracious, man, every mile you run with your own lorry costs you at least a shilling, so that if you cover five miles a day like that there's 5s. gone down the spout."
Two Things at Once
"But I can't spend my time running about looking for business and be busy carting loads as well."
" Exactly. That is all the more reason why, if you have to go and see a man about a job, it is costing you money, because you are diverting your lorry from some moneyearning business."
"Yes. You're right. I begin to see what you mean."
"As a matter of fact, travelling expenses may amount to something considerable in the course of a year, and I am being moderate in suggesting that you reckon them at £2 per week."
"All right. Let it go at that then."
"Now there is this advertising you talk about. Have you anything in mind? "
"Yes. I was thinking of a regular advertisement in the local paper and another in the small-advertisement columns of The Commercial Motor."
"I see. If you advertise every week in The Commercial Motor, that alone will cost you about 12s. per week. No doubt the advertisement in the local newspaper will he 7s. or 8s. per week. There will be about £1 a week to set aside for advertising. Do you agree?"
"Yes. That is about what I had in mind but, I say, haven't you nearly finished? "
Welcome Anxiety
"Nearly. But I'm glad to see you are beginning to worry a bit. If I can get you sufficiently worried you'll probably do something about these establishment costs, which is what I'm after. You are beginning to realize that there are such things as establishment costs, aren't you? "
" Rather. I am wondering if I shall ever be able to earn enough to pay them."
That's a good one. You need have no fear. With a properly conducted haulage business there is always bound to be a fair opportunity for the making of reasonable profits. It's the man who doesn't know what his business is costing him and who quotes cut rates who loses in the haulage business."
" How far have we got towards getting at the total? "
" So far we have dealt with: Rent and rates, 10s, per week; phone, I8s.; light, 8s.; heat, 8s.; stationery, Is.; pastages, 2s.; telegrams, 2s.; office furniture, I s. 6d.; travelling expenses, 40s.; advertising, 20s. The total, so far, is E5 10s. 6d. You had better make some allowance for legal expenses," I added.
" Surely I am not going to have to spend a lot of money on lawyers," he protested.
" Not a lot," I answered; "but you are sure to have some legal problems to solve." "For the life of me, I cannot think what they will be."
"Well, there may be all sorts of troubles. You are liable at any time to find yourself crossing swords with the police, and quite innocently, too. I have come across more than one case of a haulier being prosecuted for quite simple offences, of a kind concerning which he had no knowledge. Then again, you may want to have a contract drawn up and, if you do, I strongly aavise you to engage a solicitor.
"You see, in the course of a year or so there may be quite a number of occasions when you may have to seek legal aid. I hope you won't have to spend anything in that way, but. on the other hand, it will be much better, if you have to do anything of the kind, to have made provision for it beforehand. Forewarned is forearmed. Don't you agree?"
"Yes, perhaps you are right; but is that going to be a big item?"
Looking Ahead "No, I don't think that we need allow more than 2s. a week. You see, in this matter we are looking ahead and trying to get to know what your charges should be if you are to make any real profit from your business. When you have been going for a short time you won't be making estimates of establishment costs, which is all that we are doing now: you will have kept proper records of everything which you have spent in this connection. You will know what your expenses are and will not need to do any guessing."
"Is that the end?" he asked, hopefully.
"Not quite, but we've nearly done. You should insure your office effects against the risk of damage or loss by fire and theft."
"But is that worth while? I've never insured my own household furniture, so why bother about it at the office?"
"You are unwise not to insure your household effects, but that, of course, is none of my business. You are bound, at least, to insure the telephone in your office so you might as well take out a policy to cover all the furniture. It is unlikely to cost more than the equivalent of a shilling a week."
Loss Averted
"You agree to do so when the phone is installed. Now, add that 2s. per week for legal liability, as I might call it, and the ls. a week for fire insurance.
"There is one other small item, and that is your licence fee, which is £7 10s. for five years. That will be £1 10s. a year or 711. a week. The grand total is thus 15 14s. Id. a week.
"That is only 5s. I Id. short of the £6 per week which is all you intended to add to your operating costs as a means for arriving at the total weekly .revenue. You see how far out you were in that estimate. Had you adhered to that, and if we had not had this little chat about establishment costs, you would have been making no profit at all. "What with making no proper allowances for operating costs and overlooking these important and sometimes not inconsiderable establishment costs, it's no wonder that so many of you small hauliers find yourselves in the bankruptcy courts after being in business quite a short time.
"If only they would realize what their expenses were and made sure that they had covered them as well as adding a little profit before quoting for a job, things would be different_ If every small haulier were to do that, rate-cutting would diminish by at least 50 per cent.
"It is largely because they are ignorant of the first principles of business that so many men cut rates. It is not that they set out deliberately to cut out competitors. Rather is it, that having grossly underestimated their costs, they think they are making a profit when, actually, they are making a loss."
S.T.R. (To be continued.)