By Dave Millhouser

"Your groups ship just pulled out for their three-day cruise. If I dont have certified funds for ALL you owe us by the time they return, our buses wont be there to bring them home."

The tour brokers ears certainly must have perked up because the harbor was 600 miles from where the group lived. He owed my friends bus line a ton of money, and had been cagey about when and how he was going to pay.

This tactic isnt legal but fortunately the tour operator didnt know it. The money was paid and the buses were at the dock when the ship returned.

In ye olden days, life was simpler for bus folk. In a regulated environment charter customers had few choices, "operating" was king and marketing and sales were almost non-existent. Coach companies talked to each other about who did and didnt pay, so accounts receivable were rarely a problem.

Deregulation caused the pendulum to swing and for a while it seemed that the ONLY thing that mattered was marketing and sales. Wheels went round and round. Price wars developed, fortunes were made and lost until we figured out that you gotta sell it for more than it costs.

The pendulum has centered a bit, and successful companies combine efficient operation with customer-oriented marketing and sophisticated pricing.

One nasty hangover from the go-go era was the growing significance of accounts receivable. We were doing business with more customers, many of them unknowns. They were shopping bus companies. Operators were dealing with bus brokers and farming work to other operators.

A few disreputable tour brokers and coach companies would book large quantities of work at deep discounts, and then simply not pay until the operator was in such pain he would take pennies on the dollar. Operators failed, only to be replaced by others who thought it would be different for them.

As evidenced by the recent bankruptcy of the industrys largest bus brokers, even the biggest sometimes get in trouble.

There are things -- other than abandoning people at a dock -- we can do to reduce exposure. Here are a few that Ive stolen, but will gladly take credit for.

First, when youre in a hole ... stop digging. If someone isnt paying, stop working for them. If theyre evasive, pull the plug. If theyre good folks, experiencing seasonal discomfort, make them COD, and add a little to each charter to begin catching up.

Keep a careful eye on your accounts receivable, know where you stand and have a plan for collecting.

Dont be afraid to ask for your money. Many bus brokers, tour operators and others get their payment up front. Some of them are using your money to operate on, others are troubled. If they wont (or cant) pay you ... what the heck are you thinking running your buses for them?

Bad customers will threaten to take business elsewhere. Let them. They arent going to pay your competitor either. If they arent paying, they arent "customers." There are other words for them.

We all want to feel special, but us olde guys have figured out that if someone screws our competitor, theyll do it to us. Dont chase business, no matter how many dollars are involved, with someone who has messed with your competitor. You arent THAT special, theyll do you next.

Control your own destiny. Brokers and farmed-out work from other carriers can be a nice supplement but you need to market your own services. If sales and marketing isnt your thing, hire someone with those skills (and keep careful track of their results).

Depending on outsiders for too much of your business puts you on the back burner when things are slow, and keeps you from developing your own identity. Outsiders often care primarily about price. If you build direct relationships with customers, you can parlay value into higher revenue.

Pick your spots. Whether selling direct to the public, brokers or other bus lines, if youre going to extend credit, know who youre dealing with. Check creditworthiness and reputations, watch for signs of monetary pain. It doesnt matter how much business they throw your way ... if they dont pay.

A number of years ago the top sales executive of the bus manufacturer I represented accused me of "only selling to people I liked."

I really DID like almost all of you, but the truth is that I tried to sell coaches to people who could pay for them. Selling to folks who cant (or wont) pay hurts your company, your employees and isnt fair to your loyal customers.

I liked a lot of you that I didnt sell buses to, too.

Dave Millhouser is a bus industry marketing consultant and freelance writer. Contact him at: dave_millhouser@hotmail.com.