By Dave Millhouser

"To be or not to be?" ... is not the question.

"How big should my fleet be?" is far more relevant to profitability in our business.

Someone (way smarter than me) once said hed never seen another industry that incurred so much debt to meet peak demand.

The correct goal is achieving the delicate balance between maximizing utilization without passing up too many opportunities.

Heck, you knew that, but how do you arrive at the right size?

The folks I respect most do serious analysis of their sales, and know how many days each bus in their fleet is used. They also look at the revenue side because running a bus at cost (or less) during slow times doesnt help the bottom line and exposes you to risks that may eventually bite you. They dont buy buses to "turn wheels."

Lots of coaches have been bought, over the years, to meet sudden "opportunities" that didnt really use the bus enough of the year. Operators hoped to generate enough extra business to make it work. "Hope" is a risky marketing plan.

Even when the opportunity is year round, its important to know how long its REALLY going to last. Real excitement is financing a coach for seven years but losing the contract after three -- just as the warranty runs out.

Bus fleets are like cell phones -- smaller is better. If you are a little bit too small you can usually find an extra coach or two when things get tight. The only serious risk by being too small is that youll chase some business to a competitor. This pales in comparison to being too large.

If you have too many buses, and business slows, the first sacrifice is price. Trips are run on miniscule margins, often during the nastiest, riskiest time of the year.

What happens next can be even uglier: customers are now trained to expect cheap transportation. No amount of explanation about the seasonal nature of the charter business will ever quite convince them they arent being gouged during peak periods.

A certain amount of fluctuation is accepted, but when the spread gets big, operators lose credibility, or profit.

If all the carriers in a region independently reach the same conclusion that its best to size their company to meet normal, not peak, demand, prices migrate upward.

An ideal fleet has some buses that are paid for. When those jewels are sitting, it doesnt cause too much heartburn, and they are available to seize opportunities that are real. An all new fleet sounds good, but is UGLY when its parked.

Many well-run companies have fleets that are a mix of new and older coaches, with the mix being determined by their mechanical skills and customer demands.

Conventional wisdom has been that youre better off with a single brand of coach (even a single model). In recent years a number of operators, both midsize and large, have consciously decided to run two brands of coaches. Each approach has strengths worth considering.

Having a single model of coach simplifies maintenance, cuts parts inventory, and makes driver training simpler. Your operations folks use fewer brain cells deciding which bus goes where.

Different models, from the same manufacturer, still offer the advantage of a single relationship with parts and technical people, and some parts commonality. Often a manufacturers different models share components and a philosophy of maintenance that will serve you well.

There are a few downsides to a one-vendor approach. A single meteor, the size of a basketball, could destroy his factory. That hasnt happened yet, but we have had plants shut down by fire, flood and financial woes. A problem with one manufacturer would create a shortage, and the other builders would serve existing customers first. A lengthy disruption could cause that brands resale value to plummet, having two brands hedges your bet.

These days, delivery of parts is so efficient that most operators stock fewer parts, so inventory is less important. Most manufacturers have good technical support, so youre less likely to be left dangling than in ye olden days.

Buses are not commodities ... where cheapest is best. Your manufacturer is your partner and the relationship should be profitable and pleasant for both sides. If you only shop price, most manufacturers will lose interest.

On the other hand, all are happy to sell to a company that maintains a real bond with two builders, rewarding the most responsive with a larger share of each order. They value and compete for that kind of customer.

Each companys situation is different, so the decision on size and makeup of your fleet is an individual one.

When I was in sales, if you were buying from me, I always recommended that you stick with the standardized fleet approach. If youd been buying from the other guys, I urged you to consider the two manufacturer plan. I could be at your place in an hour.

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