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NOW UPDATED FOR 2006!
The most recent benchmarking data for Bus & Coach Operators is now available, both in print and in downloadable PDF format, with your purchase of the Bus & Coach Operators Business Benchmarking Guide. (NOTE: 2006 updates not yet available in online HTML subscription version of this guide - please call MAUS Sales Centre on 1 300 300 586 for further info.)
This Small Business Profile presents the results of a survey of Bus and Coach Operators for the financial years up to June 30, 2004. The survey was based on 26 businesses.
Whether a bus company concentrates on subsidised school runs or whether it works more extensively in the tour market, vehicle productivity is the key area to work on. More revenue per vehicle is the aim. It can be achieved in several ways, such as:
- Running the bus for more hours each week
- Running the bus over more kilometres per week (as long as there are paying customers on board!)
- Increasing the occupancy factor and minimising the number of empty seats.
If these aspects are working properly, then the revenue should cover the fixed ownership costs and the variable operating costs. So devoting your attention to base pricing is important.
And just as important is the way you target the organisations that can deliver paying customers regularly - it might be sporting clubs, school excursions or travel agents. This guide will help you identify which area of your business needs the most work.
Survey Results
These are the results of a survey of bus and coach operators. These results should not be considered to be representative of all bus and coach operators in Australia. However, they will allow business owners to identify strengths and weaknesses in the ability of their business to generate revenue, control expenses and earn sufficient profits. This is done by identifying these elements of business performance and comparing them with benchmark performance levels currently being achieved by the sample of businesses in this survey.
Most of the bus and coach operators in our survey were from the eastern states of Australia. New South Wales was the most heavily represented area, while there were no firms located in Tasmania or the Northern Territory in our sample.
Businesses from rural areas (population under 20,000) represented 50% of the entire group while another 37% of businesses were located in regional cities and towns (population over 20,000). The rest were city-based businesses.
The following table will give you a snapshot of the variance in results found in your industry for various Key Performance Indicators (KPIs). Each KPI (shown in rows) should be considered independently of each other. For example, a business with a high percentage gross profit would not normally also have a high relative percentage of their income spent on wages.
For each KPI, the table shows the average, high and low results found in the business surveyed. The KPIs should not be 'added together' under the high and low columns as they do not necessarily relate to the same business.
The KPIs show the 4th highest and 4th lowest actual result for each performance indicator. The range of values shown therefore covers the middle 80% of reported results.
| Indicator | Average | Low | High |
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| All Vehicle Related Costs | 39.42% | 24.02% | 57.41% | | Wages and Salaries (staff only, not owners)
and any Sub-Contractor Payments | 21.31% | 0.92% | 39.87% | | Staff On Costs | 2.10% | 0.00% | 4.02% | | Interest, Bank Charges,etc | 2.17% | 0.16% | 4.93% | | Net Profit (box)* | 25.53% | 3.38% | 52.98% | | Passenger Vehicles | 12 | 1 | 30 | | Drivers (including Working Owners) per Passenger Vehicle | 0.71 | 0.42 | 1.00 | | Average Kilometres Travelled per Bus/Coach
per Week | 1019 | 450 | 2000 | | Average On-road Hours per Bus/Coach
per Week | 24 | 12 | 32 | | School Transport as a Percentage of Total Passenger Revenue | 69% | 0% | 100% |
*(bos) before
owners' salaries and benefits
So, how does your firm 'stack up' against these averages? These results will give you an idea of where your business falls in relation to the sample and give you a better understanding of your relative strengths and weaknesses.
The remaining expense items each represented less than 2% of total income on average; however some businesses reported some larger results for such items as:
- Advertising and Promotion of up to 13.62%;
- Accounting and Legal Fees of up to 6.27%;
- General Insurance (excluding vehicles) of up to 3.59%;
- Non Vehicle Repairs and Maintenance of up to 4.63%;
- Telephone & Fax of up to 3.30%;
- All Other Expenses of up to 5.29%.
To summarise this, larger businesses had:
- Much higher staff costs as percentages of turnover
- Higher revenue per passenger vehicle, leading to higher asset productivity
- Less reliance on school transport for passenger revenue;
- An ownership structure where the owners became a smaller percentage of total personnel in the larger firms.
The more profitable businesses:
- Had lower non-salary overhead costs;
- Had higher personnel productivity;
- Had better productivity per passenger vehicle more on-road hours and more kilometres per week, leading to higher revenue per vehicle and better recovery of the fixed costs of vehicle ownership.
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