The contrast was startling: Two coach operators, asked the same question, gave answers that were worlds apart.

I was asked to travel with a recently hired executive and give him an introduction to the coach industry.

He asked two coach companies how much they spend on parts. One manager responded with a cost per mile, precise to the penny. The other, in this case the owner, shrugged his shoulders. Ironically, "Shrug's" company is profitable and will run in every other way.

One of our industry's most pressing problems is that far too many operators really don't have a handle on their costs.

Companies that do a good job are losing business to competition that is pricing trips based on poor, or nonexistent, information.

Years ago a tour broker decided to buy a used bus in an effort to soak up some of that easy money you folks make. He asked if his budget of a penny a mile for maintenance was about right. He was stunned to hear that -- at that time -- 50 cents was a better number. Imagine competing with this guy ... for the eights months he survived.

We all know companies that run trips for little more than the price of fuel and driver . . . with no idea of how to factor in all the other "stuff" that matters. Like, insurance, bus payments, maintenance, rent and so on.

Those and a ton of other small items are real expenses that you have to pay, and which should be an integral part of the cost calculation that determines your pricing.

Most industries have "accepted" methods for determining and categorizing costs, but our business doesnt seem to be able to get there. No one has developed a method that most operators can use.

While there aren't any easy solutions or formulas, here are some things Ive learned from customers.

First, it is possible to determine your costs. It's not easy but possible. Once youve identified and quantified everything, it's just a matter of keeping the data current. You don't need sophisticated software, a spread sheet will do.

One operator has painstakingly developed a program that calculates actual cost of a trip based on current information. He identifies his fixed and variable costs, and the computer weighs them, producing an accurate snapshot of a trip's real cost. On occasion he has to run at a loss, but at least he KNOWS it, and can make a decision whether it is smart business to operate the trip at a loss. Some of his competitors think they're making money and end up hurting everyone.

The United Motorcoach Association and the International Motor Coach Group have "20 Groups" where members share financial and operational information on a variety of areas in an effort to analyze their businesses.

Any time you can participate in this sort of thing (or even an informal gathering of like-minded operators), do it. It will greatly enhance your ideas and offer benchmarks for comparison to your business.

Within the bounds of decency (and the law) help your competitors understand their costs. They dont need to know YOUR costs, but if they understand their own, everyone benefits.

Don't lie to yourself, like assuming an engine will last a million miles, or that old A/C compressor will make it through the summer. Those notions can cost you big time. Base your price on the best information available, not your wishes.

Make sure you include the buss honest share of overhead in costing every job. Over the years Ive dealt with many companies that were honest in their dealings, and a few that were not. The folks I like best are honest all the time. But the hallmark of EVERY successful company is that its owners and managers are honest with themselves.

So, you've nailed it all down. Life is good, and you're relaxing in front of the TV when a news bulletin flashes on. You see your bus, on a charter for the Young Lawyers Club, floating down the river towards Niagara Falls.

What we have here is "the tunnel at the end of the light." If you're lucky, the biggest catastrophe youll experience in your bus career will be an engine blown 2,000 miles from home. Worst case is the Niagara Falls scenario.

You will have catastrophes, and insurance will never cover all the costs. Disasters have to be paid for, and should be factored into your pricing. If you run a trip at cost, and blow a tire, it's a disaster.

It sounds silly but the unforeseen tragedy needs to be planned for and paid for.

For the record, the executive who traveled with me has left the industry. Hope it wasnt me.

Dave Millhouse is an account representative for ABC Companies. Contact him at: www.dmillhouser@abc-companies.com