Stop Chasing Volume: How to Preserve Your Brand Reputation and Profit Growth

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In this episode of the Ground Transportation Podcast, James Blain and Ken Lucci explore the pitfalls of chasing volume in the transportation industry. They discuss why focusing on low prices and high volume can be detrimental to your business, potentially leading to financial distress and poor customer loyalty. They emphasize the importance of knowing your worth, setting the right pricing, and prioritizing quality over quantity. Listen in as they share real-life examples, revenue strategies, and tips on how to build a sustainable and profitable business model. 

CHAPTERS:
00:00 Welcome
03:28 Migration to Mixed Fleet Across Industries
05:31 Financial Impact of Chasing Volume
11:34 Systems & Processes
14:17 Good vs Bad Revenue: Your Marketing Matters
17:33 The Opportunity Cost of Under-Investing in Business Growth
21:00 The Slippery Slope of the Low-Price Strategy
26:03 Fixing the Low-Price Mindset
38:20 Put Profit First
45:07 Real World Examples
52:50 Closing Remarks

Profit First: https://profitfirstbook.com/

At Driving Transactions, Ken Lucci and his team offer financial analysis, KPI reviews,  for specific purposes like improving profitability, enhancing the value of the enterprise business planning and buying and selling companies. So if you have any of those needs, please give us a call or check us out at www.drivingtransactions.com.

Pax Training is your  all in one solution designed to elevate your team's skills, boost passenger satisfaction, and keep your business ahead of the curve. Learn more at www.paxtraining.com/gtp

Connect with Kenneth Lucci, Principle Analyst at Driving Transactions:
https://www.drivingtransactions.com/

Connect with James Blain, President at PAX Training:
https://paxtraining.com/

Episode Transcript

James Blain (00:26):
Hello everybody and welcome to another episode of
the Ground TransportationPodcast.
I am James Blain in PS training.
I'm joined as always by mywonderful co-host, Ken Luchi,
driving transactions

Ken Lucci (00:37):
I thought, wait a minute, but what, what about
wonderful and talented?

James Blain (00:40):
well, wonderful,

Ken Lucci (00:41):
that's right.
Wait a minute.
Talented is my business partner,Cole Weber, who by the way, is
off.
He's off today, so he's offtoday.
I think he's playing tennistoday,

James Blain (00:50):
There it is.
All right.
Well, so today we're gonna do anepisode on something that we are
seeing over and over in myworld.
Ken's seeing it over and over inhis world, and it's something
that.
You know, when you look at it onthe surface to a lot of
operators, it seems like themagical answer.
It seems like, Hey, if I dothis, this is gonna solve all my
problems.
And ironically enough, ittypically does the opposite.

(01:13):
It typically ends up tanking thebusiness in tons of different
ways.
And what we're talking abouthere is volume.
Volume,

Ken Lucci (01:20):
volume.
Every,

James Blain (01:21):
volume.

Ken Lucci (01:22):
my, my trips are up.
I'm doing so many trips.
So many trips.
Do you have any money left overat the end of the month?

James Blain (01:28):
Yep.
Yep.

Ken Lucci (01:29):
to, are you able to pay all your bills at the end of
the month and creating abusiness savings account?
No.
So guess what?
That's proof positive.
That chasing volume doesn'twork.

James Blain (01:38):
Oh, and it's worse than that, right?
Because do you have a brand?
Are you so obsessed with chasingvolume that instead of providing
an experience to each and everypassenger that has them craving
you wanting to only use you astheir provider, you are chasing
the TNC model and now you'recommoditizing yourself.
And ladies and gentlemen, I havebad news.
You can't compete with A TNC.

(01:59):
Just can't.

Ken Lucci (02:00):
price.
Low price is 100% a race to thebottom.
I had an

James Blain (02:04):
Yep.

Ken Lucci (02:05):
contact me the other day who said, you know what I do
every year?
I make, uh, I make mystery callsto all my competitors and I
undercut people by 10%.
and And outta the same breath.
This is, this is a guy who'stelling me that he can't pay
A-Z-I-D-L loan.

James Blain (02:21):
Yeah.

Ken Lucci (02:22):
Okay?
Right.
So, I mean, how do you deal withthat kind of a thought process?
That's literally like you're afive star restaurant, white
tablecloth restaurant, and, andyour solution is to go get the
shittiest cut of beef.
And put it on sale.
What do you think that does whenthey're cutting through shoe
leather and they're like, I'mnot coming back here.

James Blain (02:43):
No.

Ken Lucci (02:43):
So there's a direct correlation between, to me, low
price and seeming like, and nocustomer loyalty.

James Blain (02:51):
Yep.

Ken Lucci (02:52):
one.
and the other thing is from youare in the market and you are on
the bottom half, let's just saythe bottom third of the market
price wise.
Your, your business doesn't haveany value.
I'm talking about our industry.
I'm not talking about low pricecar washes.
I'm not, I'm just talking aboutour industry because, why do I

(03:13):
say that?
Because the margins are so thinto begin with.
You need to be priced at the, Ithink the top third of the
market.
Right?
And

James Blain (03:20):
Yep.

Ken Lucci (03:21):
you need to, if, if you have to sell on low price,
you're in front of the wrongcustomers, period.

James Blain (03:28):
Well, and let, let's take that to a, a, a
little cross industry for amoment, right?
I obviously, we, we work acrosstons of different industries.
We saw this initially when youstarted seeing guys that were
used to the black car limousineside of the business, and they
started moving towards the motorcoach space.
They started moving towards thelarge group moves, right?
Instead of trying to win a costwar.

(03:50):
They were going out and theywere buying leather interior
vehicles.
They were buying high-endvehicles.
They were putting a chauffeurbehind the wheel.
They were taking and elevatingthat service.
And the mindset in that industryfor a long time had always been
you buy the cheapest vehicle youcan.
You run it for as long as youcan.
You try to control all yourcost.
What.

Ken Lucci (04:08):
you close at five o'clock at night,

James Blain (04:09):
you close at five o'clock at night.
Yeah.
So now you've got

Ken Lucci (04:12):
with that,

James Blain (04:13):
and there's nothing wrong with that, but it's, it's
that difference of now we'retaking, we're gonna put someone
high end, we're gonna have ahigher end vehicle, and they're
demanding higher cost.
And I think the shock there waspeople were willing to pay more
for the customer service, forthe nicer vehicles, for more of
a luxury feel, even in thelarger vehicles.
And what.

Ken Lucci (04:33):
it min, to your point, there's always been mini
bus, uh, mini buses with clothseats and

James Blain (04:39):
Yep.

Ken Lucci (04:40):
Look at the GRE's, right?
With the leather interior andthe wood.
They, they command more.
more, more money per hour.
They make more profit.
They last longer.

James Blain (04:49):
Well, and I think that's key to understanding this
game, right?
If your goal is to try and bethe lowest cost operator to do
as many trips as humanlypossible to try and get it done,
to try and get it ran out, it'snot gonna work.
You know, we talked, one of ourvery first episodes I mentioned
why I.
One used to be one of myfavorite restaurants here in
Kansas City, blew it for mebecause during restaurant week,

(05:12):
they threw all the presentationout the window.
They threw everything out thewindow, and they were just
trying to get plates on tablesas fast as possible instead of
actually focusing on what theydo.
So I think your brand suffers,and as a result of making your
brand suffer, your passengersultimately aren't gonna see the
value.
And you start losing out.
So what does that look likefinancially though, Ken?

(05:33):
What I mean?
'cause that, that starts showingup there too, because you start
getting slimmer margins.
Right.

Ken Lucci (05:39):
Well, I'm gonna, I'm gonna give you a little bit of
cheat sheets on a little bitinside baseball when we do a
financial review.
The only reason at this point in2025 that we go back and we look
at 20 nineteens revenue KPIs,

James Blain (05:55):
Okay.

Ken Lucci (05:56):
per trip, revenue per trip is, I wanna see whether
that owner okay.
Has increased his pricing.
After the pandemic, operatorsthat we see that are in the
worst financial condition.
Or maybe 5% of where they usedto be in 2019.
So I'm looking at, uh, sedansthat are a hundred.

(06:19):
They were$129 in 2019, andthey're 134 or 139 today.
Right.
That's crazy talk.

James Blain (06:28):
Oh,

Ken Lucci (06:28):
that's number one.
That's number one.
I look at the pricing.
And I don't see that they'veincrementally gone up.
So when we do the revenue KPIs,we pull everything from, um,
Santa

James Blain (06:38):
oh.

Ken Lucci (06:39):
Warrior fast Track, and we look at revenue per trip.
And I look at the, the, the, thehealthy companies are between 25
and 30% higher than, than prepandemic.
And the most healthy.
ratcheted up their pricing everyyear a little bit since, right?
They went way up after thepandemic to get people to come
back to work, but then theyadjust their pricing'cause they

(07:01):
know their cost structure.
So when I see people that are,that are 50, 60, 70% airport.
And their gross margins shouldbe 35%.
So after you turn the key and doall the work, you should have 35
bucks out of every a hundredleft over to pay overhead, pay
yourself, and show a profit.
When I see those companies thathave 28% gross profit, I say to

(07:25):
them, you, you, you, there's,there's no doubt in my mind that
your pricing is way, way toolow.
You don't have enough money leftover.
Okay?
'cause I want you to thinkabout, it's very simple.
yourself the question as anoperator, number one.
Do you have to juggle payingyour bills at the end of the
month?
Do you have to say, well, I'mgonna pay this one late, right?
I'm gonna pay this one late.
I'm gonna carry a credit cardbalance.

(07:47):
Okay?
That's the number one problem.
That's the number, that's thenumber one thing that tells me
that your prices are too low.
Number two.
Are, are you literally notpaying yourself a decent wage?
I saw a company this morningthat's for sale, million dollar
company for sale, know, been inbusiness for a long time.
A, the, the, a potential buyersent it to me and I said, Jesus,

(08:08):
the guy has literally taken$25,000 out in W2 income average
over the last three years.
He, he does not have enoughmoney left over to pay himself.
Right?
The, the next thing is askyourself a question.
At the end of every month, areyou taking money off the table
and creating a savings account,or are you living on lines of

(08:28):
credit and you literally, at theend of the month, you're lucky
if you have a thousand dollarsleft.
That's not a business that'sliterally just churning money.
Right.
And it's, and, and it's, youhave one problem and you're out
of business.
You have one thing that happens.
So I, I, I, I can't convincepeople sometimes that.

(08:50):
If you are competing on lowprice and, and that's your
answer to everything.
You are shortlived.
Your business is Shortlived.
True story, very true story.
I had a client call me up.
He's a retained client.
We do his financial reviewsevery single month and every
month we talk to him about howhe was last year verse at this
time and the next 90 days.

(09:12):
We do a sales plan with him.
Comes to me and he says thecorporation called him and he's
got a, a shuttle five days aweek that he can bid on that
takes him from a train stationto their office building, right?
So it's like maybe six in themorning till 10 in the morning
and then he comes back.
So we did a complete pricing proforma with him and he says,
geez, Ken, you know.

(09:34):
They're paying$88,$88 a segment,and we're priced at 130.
He said, I'm not gonna get thebusiness.
I said, wait a minute, you justtold me that the guy that's
doing their work has got a DOTflag.
You told me that his DOT fileis, is, it's either suspended or
he has a flag on his DOT.
You, you, are you telling methat?

(09:55):
Do you want to cut your cost tothe point where you know

James Blain (09:59):
Okay.

Ken Lucci (09:59):
be in that condition?
Sell the value of what you got,the best piece of equipment that
you can, leather interior, thebest chauffeur, redundant
equipment in case it somethingbreaks down, and at the end of
the day, the chips fall wherethey may.
The guy follows my advice.
He's got a two year contractwith them now.

James Blain (10:19):
Well,

Ken Lucci (10:20):
The guy, he, he, he didn't, did not compromise, but

James Blain (10:24):
right.

Ken Lucci (10:26):
to the corporation, look, the longer we do this, and
the more business you give me, Ican give you.
best possible pricing in allareas, but this is why I need to
be at this price because you'reasking me for, for$5 million
worth of insurance.
You're asking me to see thecriminal background checks on my

(10:47):
chauffeur because you're adefense

James Blain (10:49):
Yeah.

Ken Lucci (10:50):
and you're telling me that the guy that did it for low
price doesn't have any of thesethings.
So chasing volume is not theanswer, and just because you buy
things in your life on lowprice.
Doesn't mean that your properclient targets do, right?
If, if you literally are doingPPC ads and all you're doing is

(11:13):
getting calls from people thatare gonna use airport service
because they're in town.
Once this year, you, yourmarketing and advertising in the
wrong place.

James Blain (11:21):
But let's, let's tie some stuff back for a
minute, because I think theoverarching thing that's gonna
come up over and over and overis twofold.
The first is like any other partof your business, and this is
where I live.
This is my world systems andprocesses.
If you don't have systems andprocesses, if you don't have a
plan, you're gonna suffer.

(11:41):
The other thing is somethingthat came up when we had Bruce
on and what we talked about isyou can have it done right.
You can have it done fast or youcan have it done cheap.
And guess what?
Anytime I move one of thosesliders, the other is gonna
adjust.
I can't give you all three ofthose.
I.
So what we see over and over andover and what I try to help
operators when they're puttingtogether their training programs

(12:04):
or developmental programs isyou've got to be able to take
what you are doing and show thatsame value.
It goes back again, ironicallyto Bruce when he would talk
about, when I pick up the phone,when I'm talking to someone and
they ask me for price.
I'm not just giving them anumber.
Same thing that you justmentioned with that defense
contract.

(12:24):
If they want all of these thingsand you are trying to throw in a
low bid, you are not only doinga disservice to yourself, you're
doing a disservice to everybodyaround you.
Because guess what?
If you have the systems, you'vegotta be able to pay for the
training.
You've gotta be able to pay forthe maintenance, you've gotta be
able to have newer vehicle.
Exactly.

(12:44):
And if that's not reflected inthe presentation that you give
and the price.
Guess what you're gonna lose.
And the other side of that is,and this is the, in my personal
experience, owning and runningbusinesses, right?
I, I've been doing it now, God,15 plus years.
What I figured out on my firstbusiness, that was one of the

(13:06):
hardest lessons, is that youcan't.
Get every contract.
You can't get every bid, youcan't get every quote.
And if you want every singleone, you don't get it.
And I, my father's favoritething he says to me all the
time, he goes, the mostexpensive education you ever got
was the first business.
And I think I've shared thisbefore.

(13:27):
My first business was adisaster.
I had no clue what I was doing.
I lost money.
I walked away.
Thank God I didn't have anydebt.
'cause I, I've managed to breakeven, which I can tell you, I
know a lot of guys that don't ontheir first business.
But the education I got therewas the most crucial thing and
there was two huge takeaways.

(13:47):
The first was just'cause I putin a quote just'cause I go in
and do a proposal, doesn't wantit.
I learned later on, there's beentimes that I've pitched a client
or I've pitched a job or I'vepitched a quote or I've done an
RFP and I get deep into it and Igo, nah, I don't want it.
And ironically enough, sometimeswhen you do that, the client
comes back and goes.

(14:08):
The hell do you mean you don'twant it?
Well, I can't.

Ken Lucci (14:11):
listen.
That's a golden nugget rightthere.
Not, not every client is.
Just because the phone rings andyou get the sales lead,

James Blain (14:21):
It's not.
Might not be your guy.

Ken Lucci (14:23):
it doesn't fit your definition of good business.

James Blain (14:25):
Yep.
And ironically,

Ken Lucci (14:27):
revenue is.

James Blain (14:29):
right, and the funny thing is there's been
plenty of times that it'shappened again and again
throughout my career.
I.
When someone comes up and theywanna bid and they want this,
and I say, Hey, I'm not evengonna bid you.
Well, why not?
Because you are asking me togive you something that can't be
done at the price you want.
If you can find, you're settingme up for failure, you're

(14:49):
setting you up for failure, noone's gonna win in this
situation and I'm not going tocompromise what I'm doing and
try to kill myself to make ithappen.
And you know what's funny?
I'd say probably about half thetime they go, okay, well.
Explain that to me.
What, what would it cost toactually do it?
What, what would it take toactually get it done?

(15:09):
Now, I'd love to tell you everysingle one of those comes
through, but you know, in sales,if you're getting 30%, you're
doing well.
And what I found is that's aboutit, right?
About half of that half, right?
So now you're down to about 25%.
Half of that half comes back andsays, all right, put the plan
together.
Let's do that.
Because this is what I want.

(15:29):
This is what I need, but Ididn't know, or I didn't
understand what it was gonnatake to get that.

Ken Lucci (15:36):
Well, and, and part of, part of the, the not chasing
the volume play is again, it'swhere are you advertising?

James Blain (15:45):
Yep.

Ken Lucci (15:46):
I had someone the other day that told me they're
spending 4% of their totalincome.
We've, we discovered this whenwe're doing the review.
4% of their total income ondigital.
Advertising and SEO,

James Blain (16:01):
How much do they have as their total marketing
budget?
Do you know?

Ken Lucci (16:04):
well, it's a million, it's a million dollar company,

James Blain (16:06):
Okay.
Yeah.

Ken Lucci (16:08):
Okay.

James Blain (16:08):
that's a huge chunk.

Ken Lucci (16:10):
4% of that,

James Blain (16:11):
Yeah.

Ken Lucci (16:12):
like 40, 40,$50,000.

James Blain (16:14):
Yeah.

Ken Lucci (16:15):
So I'm like, okay, so let me understand something.
I can't find you on page onewhen I plug in your city.

James Blain (16:26):
Yep.

Ken Lucci (16:26):
And I, I plug in limousine service, airport
service, this, that, and theother thing.
I can't find you organically onpage one, your Google My
Business not even your correctaddress.
exactly are you spending thatmoney to me?
You know, understanding that notall revenue is good revenue,

(16:50):
understanding that growth needsto be strategic.

James Blain (16:53):
Yep.

Ken Lucci (16:53):
to be profitable.
It needs to be among clientsthat help you build your brand
and enterprise value.
I mean, those easy tests aresimple.
I mean, I don't even have to doa review with a customer.
I will ask the question.
Do you have savings?
No.
Well, no, we don't have asavings account.
We just keep everything in achecking account and you know, I

(17:16):
have less than$10,000.
Okay.
Do you have a, do you have aline of credit?
Yes, I do.
Is it maxed out?
Yes, it is.
Okay.
Are you able to pay your billsevery month?
No, I'm not.
Well, obviously something iswrong.

James Blain (17:29):
Yeah, you're one bad month away from the end of
that business.

Ken Lucci (17:32):
right.
You know, and, and the otherpiece of this puzzle on volume
is especially post pandemic,there's so.
So there's so much less evennow,

James Blain (17:42):
Yeah.

Ken Lucci (17:43):
quality vehicles out there and less quality
operators.
The concept of opportunity cost,okay, now this is, this happens
with us constantly, okay?
I've got at least five peoplechasing me to do valuations,

James Blain (17:58):
Oh.

Ken Lucci (17:58):
and I already know from talking to them that the
metrics of their business arenot such, and they want to get
out this year.
It's either that.
I, I, I can chase thosevaluations or I can work with
one guy who wants to exit in twoor

James Blain (18:14):
Yep.

Ken Lucci (18:15):
and he's got all of the fundamentals.
He just needs my help.
He's already a b and he needsmy, he my help to get him to an
a plus.
So, not a, not all clients are,are, are really meant to be.
Right?
There is a

James Blain (18:29):
Huh,

Ken Lucci (18:29):
of good business that you have to develop on your own,
right?
Like with you.
know, you are an investment intraining.
To

James Blain (18:38):
absolutely.

Ken Lucci (18:39):
you're not an expense.
But if someone comes to you andsays, you know, I'm, I'm not
gonna do, I don't want to addanother recurring bill, guess
what?
They don't

James Blain (18:47):
They don't get it.

Ken Lucci (18:47):
don't, they don't get it.
If they're not measuring qualityassurance and, and I had a guy
the other day or while back tome, say, I don't care if I have
bad reviews.
I just am interested in making aprofit and I want to build value
in my company.
I'm like, you, you don't get

James Blain (19:02):
Then you miss the boat.

Ken Lucci (19:04):
You completely missed the boat.
So this is a guy that chasestons of low price weddings.
If I told you the name, you'dknow exactly who he

James Blain (19:11):
I think I already know who it is.

Ken Lucci (19:13):
Right.
He's like 1.9 reviews, like themost horrible reviews.
But, but my point on theopportunity cost, let me get
back to that.
You know, if, if, if you.
Are if you only have three limobuses or you only have two
stretches, or you only havethree GREs, right, and you've,
and, and you wanna do weddingsor you wanna do group and
meeting, if you sell to thelowest price early in the

(19:36):
season, you've missed theopportunity to do business with
larger group and meeting or.
The, the, the, the, the higherprice bride who's working with a
wedding

James Blain (19:49):
Right.

Ken Lucci (19:50):
and she's at the, at the top shelf venue.
So, so your$300,000 Grech.
He is parked in the wrong end oftown, right?
So you don't want

James Blain (20:00):
Huh.

Ken Lucci (20:01):
to see the brand and it's not in front of the best
wedding ven venues.
I mean, at the end of the day,measuring opportunity cost.
The same thing if you don'twanna farm out your best
clients, but you are playing alow price game and your best
clients call you and you don'thave in-house equipment
available and you've gotta usethe, you know, an IO from

(20:22):
Facebook, you have a problem.
So the.
Not all good.
Revenue is good revenue.
Understand.
You decide what your definitionof good business is.
I have to tell you, I don'twanna deal with people who
question our retainer because wegive a money back guarantee on
what we do.
We're the best at what we do andI know it, and I basically say,

(20:45):
look.
I've never had somebody say tome that my retainer didn't pay
for itself times three x becauseof the, of the data that, and
the profit improvement we'vebeen able to make and the, and
and the, the ability to sell acompany when others couldn't.
So opportunity cost is key.
Knowing who your ideal clientis, right?

(21:06):
So this is gonna bring us up towhat in your mind is the most
competitive, is the where wehave to be the most
competitively priced?
What is it?

James Blain (21:15):
Well, so I think, I think before we go there, I
think the, the part we have tohit that you've kind of alluded
to is the slippery slope thatyou're talking about, right?
Because I think beyond where youhave to be most competitive.
What we've talked about so farlines up this slope.
If you are at a point where youare trying to be low price.

(21:37):
You are going to force yourselfinto volume.
You're not gonna have a choice.
I'm the lowest price guy.
The only way I can make moremoney is to do more trips.
What happens if I do more tripsand I don't, I don't care what
kinda operator you're, I don'teven care what industry you're
in.
This is everybody that literallyis out there running vehicles.
So I now have to do more trips,which means I have to try and

(21:59):
squeeze more out of each one,which means if I hit a slow
month, I don't have the volume.
To your point.
I don't have the time, I don'thave the money to be able to
invest in training.
I don't have the time, I don'thave the money to invest in
anything other than trying toplow into those trips.
So,

Ken Lucci (22:16):
keep the, and keeping the lights

James Blain (22:17):
and keeping the lights on.

Ken Lucci (22:19):
it it's like being a squirrel in a cage.

James Blain (22:21):
Well, yeah, you, you have this self-fulfilling
prophecy where you have tobecome more volume.
And then the most interestingthing I've seen happen, and this
blows my mind, is people,instead of going in and hitting
the brakes, they literally,right, you're in a nose dive and
they start throttling up towardsthe ground going, Hey, let's

(22:44):
just reduce the prices so we canget more volume.
Now you are literally doing theexact opposite of what you
could.
So I think, I think before wetalk about where you have to be
most competitively priced, Ithink the, the one thing I wanna
hit on right now is if you arelistening to us and you think
you might be in that nose dive,I think the first thing you've

(23:05):
gotta do is understand you'rethere and start figuring out how
to start increasing prices topull back on volume.

Ken Lucci (23:14):
Right, because doing the same thing over and over
again and expecting thedifferent results is the
definition.
It's, it's insanity.
And to your point, I mean, I, Ihad a guy call me about three
weeks ago and says, look, youknow, I've got, I don't know my
pricing.
I.
I'm, I'm trying to do a ton ofaffiliate

James Blain (23:32):
Yeah.
Okay.

Ken Lucci (23:32):
just don't know my pricing.
I'm like, okay.
Uh, okay, so, um, you're keepingyour financials and QuickBooks.
What?
Well, well, if, first of all, ifyou don't have your financials
and QuickBooks and you don'thave your financial statements,
it's literally, you know, you'relosing money, but you don't know
where,

James Blain (23:50):
All right.

Ken Lucci (23:50):
So

James Blain (23:51):
The boat's sinking, and I'm not gonna go find the
hole.

Ken Lucci (23:55):
Just crazy.
And, and another true story, II, I had a customer that was
referred to me by a really goodguy.
I mean, he is an insurance custinsurance agent, and he
literally begged me to take thisclient, okay?
And I called the guy and I couldinstantly tell was not a kind of
operator I want to deal with.

James Blain (24:14):
Okay.

Ken Lucci (24:15):
Um, obsessed with low price.
Telling me how great hisbusiness is.
But his business is no,absolutely no revenue growth.
His equipment is all old.
He cannot afford to buy newequipment, but yet he's telling
me how good he is.
we did the valuation.

(24:37):
He wasn't satisfied with thevalue.
And I said, you're, you'retelling me you, you have,
you're, you're 60.
You can't, you can't pay thebills at the house.

James Blain (24:47):
Yeah.

Ken Lucci (24:49):
You had to sell your house because you cannot afford
to pay your mortgage, but you'renot listening and you are
telling me you, you don't wantto change how you do business.
I'm, I'm sorry, we're not gonnabe able to help you.
Fast forward a week ago, I seethat he's got his business up
for sale with another broker.
With a broker, by the way, witha bus.

(25:10):
Just a general business broker,and.
Somebody called me, he said, Ithought you did that valuation.
I said, I did.
But he didn't wanna listen tochange.
He did not wanna listen to thefact that this is what his
business is worth.
He didn't want to accept that.

James Blain (25:23):
Right.

Ken Lucci (25:24):
it was, everything about him was low price.
You read the reviews, they'retalking about vehicles breaking
down.
I'm sorry I didn't have anextra, an alternator.
I mean, just my, my question foroperators like that is, don't
you have pride in yourself?
Don't you deserve.
To make a profit, I don'tunderstand.

(25:45):
Well, I have to be low priced.
You don't understand my market.
Well, you know, it's funny.
We've, we valued about fivecompanies in the general area,
and four out of the five, youbeing the fifth are, are making
good money is the problem.
You, is the problem the market,the customers or your mindset.

James Blain (26:03):
Well, I think one of the things that's worth
mentioning, and I saw this in myfirst business, I've seen this
in almost every business dealingI've ever had.
I think there is a general fear,especially among small business
owners, that if I raise myprices, my clients are gonna
revolt, they're gonna leave me.
Now, there's a couple thingsthat are, are really true that

(26:25):
you have to think about.
One, if you are raising prices,you better be delivering value
on what you're doing.

Ken Lucci (26:32):
Oh, chop

James Blain (26:33):
But

Ken Lucci (26:33):
hundred percent.

James Blain (26:34):
the most important lesson that I ever learned was
from when I worked with myfather-in-law.
And he, his, his thing was yougo in and you raise prices.
If nobody complains, you wait alittle bit, you raise'em again.
If nobody comes in, you raise'emagain.
If they start complaining,right, if they start being
upset, you do one more, and thisis counterintuitive, but you

(26:56):
raise it one more time, right?
Because that first set of peoplecomplaining were probably your
cheaper customers you wanted toget rid of anyway.

Ken Lucci (27:06):
No loyalty to begin with.

James Blain (27:07):
Right?
The the point where you now areat once you've raised those
prices.
Now does that mean we're gonnago in and we're gonna double
price overnight?
God, no.
But you now get to the pointwhere, guess what, in raising
your prices, if you've done thisright, the ones that fell off.
Those are the ones that, hey,they weren't the right fit.

(27:28):
They weren't the right ones.
Look, I, I'll tell you, we are acompany at PAX that, you know,
we operate a little differentlythan most companies'cause we're
a membership based organization.
You know, when Covid hit, I tooka personal financial hit.
Bruce took a personal financialhit and we, we literally did our
own type of package to help.
But I can tell you when we hadto raise prices.

(27:51):
It hurt.
And one of the things that Ilearned after that is the guys
that were complaining the mostabout the prices raising this
and that were the guys thatweren't using it, were the guys
that didn't have people inthere.
They weren't using it.
They weren't getting the value.
They weren't translating apps totheir passengers.
They weren't able to raise theirown prices and compensate and
pass through.

(28:11):
And those are the ones that welost.
And to your point, earlier.
There's this fear of you don'tunderstand my business, you
don't get my business

Ken Lucci (28:19):
uh.

James Blain (28:20):
Small business is small business.
We all have our unique things,but at the end of the day, none
of what we do is, you know, thesecret thing that only we know,
that only we do.
You have that thing that makesyour business unique, but
everybody owning a business isdealing with similar and related
problems.
And when you refuse to see it,you start holding yourself and

(28:43):
your business back now.

Ken Lucci (28:45):
Well, if you also have no relationship with your
clients, no ongoingrelationships with your clients

James Blain (28:52):
stickiness

Ken Lucci (28:53):
and there's no stickiness there, right?
So I re I remember being, I.
Uh, when I was doing a lot moreon site, I remember being in an
operator, and this is a bigcompany,

James Blain (29:05):
now.

Ken Lucci (29:06):
the reservations phones were ringing and the
owner himself took thereservation call, right?
Excuse me, Ken, I'm gonna takethis.
Absolutely.
That's the priority.
literally said he, he looked up,he looked them up on his
reservation.
Oh, Mrs.
Smith, you traveled with us inOctober.
Welcome back.
Thank you so much.
Um, a, a week.
Uh.

(29:27):
going to the airport.
Tell me the flight.
Oh, terrific.
How long are you gonna be gonefor?
Listen, let's book the roundtrip because we typically get
busy on Fridays.
Let's book the round trip.
So my, my whole point is he hadthe relationship with them.
He and I said, did you know whothey were?
He says, yeah, vaguely.
I just looked it

James Blain (29:43):
Oh,

Ken Lucci (29:43):
on the, but, but his whole persona was, he knew who
they were.
them for calling and createdthat relationship.
He's constantly building thevalue of his business.

James Blain (29:53):
yep.

Ken Lucci (29:53):
thing that I know that the same guy does is he
sends out every three weeks orevery month he sends a
newsletter, electronicnewsletter to to, to his client
base.
But on top of that, he also haspeople.
His reservationists when they'renot busy.
'cause he got aggravated walooking at watching them sit on

(30:15):
Facebook.

James Blain (30:15):
Huh.

Ken Lucci (30:16):
He, he has them call people.
Let's just say it's April.
He has them call people thatused them last May or last June
and say.
You know, this is so and so.
This is Stacy from, so From suchand such limousine.
We know that you, uh, used thislast year on spring break.
Just double checking to see ifyou're gonna need us.

(30:37):
Give us a call back and pleaseask for me.
And I, I'm telling you, when youlook at the, we do a, a review
of.
How many existing customers usedhim last year, the year before,
the year before that?
Each year they're growing,

James Blain (30:52):
Yeah.

Ken Lucci (30:53):
this, it's not coincidental.
The guys in the top third as faras his pricing is concerned.
Okay?
Now, the funniest thing in theworld is when I met him in 17,
60% of his business wasaffiliate war.
Now it's 30% of his business.
70% of his business is now, uh,is now his own corporate
clients.

(31:13):
So he's at the top third in hismarket.
He's got.
When we do a heat map, his clexisting client use is growing
and growing

James Blain (31:24):
Yep.

Ken Lucci (31:24):
he's consistently telling them, Hey, you know
what?
Just wanted to let you know wehave this brand new sprinter,
uh, for executive nights out, orexecutive.
If you've got any dinners out,let us know.
We've got this brand new minibus and this is how you use it.
So he's constantly communicatingwith his client.
So the other day I said to him,tell me something.
What are you spending on PPC?
Oh, he said, you know,practically nothing.

(31:46):
I mean, we'll ramp up forweddings.
We'll, but I know somebody inthe same town that's spending
three grand and, and they've gotthe secret sauce on PPC.
Right.
Which is like, it's crazy.

James Blain (31:57):
Well, but it's mindset.
but, there's, there's somethinghere that we have to point out
because I see people screw it uptime and time again.
Okay.
The PPC guy is going out andhe's trying to find his end
user.
And he is trying to pull thosein.
I wanna reach these people thathave these events that's doing a

(32:18):
wedding, that's doing whatever.
I'm gonna go reach them and I'mgonna go find them individually
and I'm gonna make a stream in.
One of the things I learned veryearly on is that you wanna try
and find partners.
You want to try and findalliances.
If I know that I'm doingweddings.
I might have some money in PPC,but guess who I'm taking care
of?
Guess who I'm, and you talkedabout this when it came to

(32:39):
restaurants and others.

Ken Lucci (32:40):
Yep.

James Blain (32:41):
the wedding planners out to lunch.

Ken Lucci (32:43):
the best wedding photographers in town.
The caterers a

James Blain (32:47):
together, right?
Those are, those are my peoplethat I'm working with and those
are my people.
Now, the other thing iseverybody wants a guy.
So not only that, you've gottabe able to then say, Hey, if I
got this lead off of PPC, hey,no, we'd love to take you care
of you.
By the way, we have theseincredible people that we work
with.
We know the best of the best intown for everything.

(33:09):
Do you have your caterer?
Do you have, you know this, doyou have your dj?
Do you, do you have all thatplanned out?
Because we would love to helpmake that easier for you, and I
can send you over a list to someof the top people in town that
we work with that we know willtake care of you.
And now all of a sudden it's,well, hold on.
I called this guy for a quote.
He's making my life easier.
He's providing value.

(33:30):
I haven't even dropped a dimeyet.
And what does it cost you tokeep that list?
They're sending you referrals.
You're sending them referrals.
So I think a lot of people havelost that.
And one of the things that I,your, your network is your net
worth.

Ken Lucci (33:44):
mm-hmm.
It's the give to get, it's thegive to get.

James Blain (33:47):
Yep.

Ken Lucci (33:48):
val, it's the giving of value before you sell'em
anything.
Right.
It's, there's no question aboutthat.
And, and look, I was justreading something today about lo
the low price clients from aperspective of loyalty.
They're not.
the client

James Blain (34:08):
They're gonna go find the next cheap price.
I.

Ken Lucci (34:10):
That's basically it, and it, my answer and, and I,
you know, I, I, I'm lucky, we'reblessed with a lot of business.
I had an operator, been inbusiness for a long, long time,
say to me, well, you know, therejust aren't that many corporate,
uh, accounts anymore in thisarea.
They've all moved away.
Well.
I mean, I literally have myresearcher pull up the fact that
there's nine Fortune 500companies

James Blain (34:33):
In the area.

Ken Lucci (34:34):
Right.
Well, I can't just walk in thereand find them.
Okay, great.
I, I literally put a listtogether of all the business
networking groups.
You know, it, it is the mindsetand my answer to people who say
they can't go up on their prices'cause their customers won't pay
it is you have the wrongcustomers then.

James Blain (34:52):
Well,

Ken Lucci (34:53):
I grew up in Massachusetts.

James Blain (34:54):
yeah.

Ken Lucci (34:55):
joke about the W towns, right?
Wellesley, Weston Wayland.
Right.
And those W towns.
Those W towns are where all themoney

James Blain (35:05):
Yeah.

Ken Lucci (35:06):
and at the end of the day, if you don't think those
people who are sitting in a$3million,$2 million price, the
best zip codes in your area, doyou think they want the Uber
driver to know that they'regoing out of town for 10 days?
The answer is no.

James Blain (35:21):
God no.

Ken Lucci (35:22):
getting, getting back to what people are obsessed with
and is, you know, number one, Iif in every category selling to
corporate clients, the mostimportant thing to the corporate
client is you make'em look good.

James Blain (35:37):
Oh.

Ken Lucci (35:37):
travel manager, you create that relationship.
I know, I know companies thathave been doing business with
the same.
Corporations, the same corporateclients for 15 years because of
the relationship and, and theyhave gone up on their prices.
The secret to going up on yourpricing is, is justifying it is,

(35:58):
Hey, listen, these are thethings that have gone up.
Uh, this is why I have to go upon, in price on you this year.
Right?
But.
general, if, if your strategy isto be the lowest price in the
market, cannot, you, you just,you're not gonna survive.
And just ask yourself thosequestions.
I mean, are you paying yourself?

(36:20):
Are you the last one to be paid?
And you just get what's leftover?

James Blain (36:23):
Yep.

Ken Lucci (36:24):
well, you're, if that's, if, if yes, then you're
targeting the more the wrongcustomers.
If you cannot make a living.
Better than if you went out andyou, put your services in the
marketplace and got yourself aneight to five job.
If you are not making at least athird more owning your business,

(36:45):
in the wrong business becauseyou certainly, your risk is much
higher, right?
When you just take an eight tofive job, what's your risk
getting hit by a car on your wayto work?
But as

James Blain (36:55):
Okay.

Ken Lucci (36:55):
the business, you literally have risk, risk from
employees, risk from customers,lawsuits, risk from accidents,
risk from car accidents, riskfrom the vehicles going down.
And to me, I don't understandwhy people think that if my, if,
if business is slow.
I'm gonna lower my prices.

(37:16):
No.
If business is slow, quadrupleyour marketing, quadruple your
outreach.
Reach out to your existingclients, create that sales
machine.
You know, there is a true state,a true story, true statement,
that the only organism thatgrows for the sake of growth is
the

James Blain (37:35):
The cancer cell.

Ken Lucci (37:36):
All growth in business needs to be strategic

James Blain (37:41):
Okay.

Ken Lucci (37:41):
is not adding profit.
Adding value and building yourbrand.
You're serving the wrong client.
You're serving the wrong,totally serving the wrong
client, and either you have thewrong vehicle mix or your, your
marketing dollars are beingspent in the wrong place.
I mean, remember what we talkedabout as far as the opportunity

(38:03):
cost.
I mean, the worst thing you wantis it, is you.
You are selling low priceairport transfers.
One time customers

James Blain (38:14):
Yep.

Ken Lucci (38:14):
have, because you're constantly creating, you're
spending money to create onecustomer.

James Blain (38:20):
But this doesn't have to be complicated either,
right?
I think a lot of people think,you know, oh man, you gotta have
these super complicated systems.
You have to do this, do that.
So I remember, uh, a turningpoint for me as a business owner
was when I read the book ProfitFirst and the Turning Point for
me of that book,

Ken Lucci (38:38):
should read that book, profit

James Blain (38:39):
we'll drop a link in the, in the description,
right?
Uh, but Profit First has areally simple concept, and
that's that anytime revenuecomes in, I'm gonna split it
out.
And what it's going to do,especially if you're an owner
that's not getting paid.
It forces you to getcompensated.
So it says you have this muchmoney for operating expense.

(39:00):
You as the owner are taking thismuch money, you're setting aside
this much money for taxes,right?
That's the simplified version ofit.
And guess what that means?
And this, for as an owner, youtend to operate on this mindset
of.
I'm going to spend what I have,I'm gonna spend what I need.
But if you have these accounts,if what you are getting paid and

(39:21):
what you're paying for taxes ispulled out, and you only have so
much left over to work with,there's this beautiful
psychology of goodentrepreneurs, then we'll figure
it out, right?
You're going to figure out howto make that new budget work.
And so by having a system likethat, that forces you to do it,
it's going to put you in a placewhere, hey.

(39:43):
I know what I'm getting.
I know what I'm doing.
Now, I would also argue, if youhaven't heard the episode that
Ken did on pricing, you need toimmediately go back and listen
to that because that's yoursystem on pricing, right?
Your system on pricing is, Iknow what my costs are, I know
what I need to make, and by theway, what I haven't touched on
yet in Profit First is you havea set profit.

(40:05):
We're gonna run X amount ofprofit.
We're not gonna guess.
It's not what's left over.
We're setting the society.
We're running 10, 15, whateverthat is.
That's what we're gonna run.
Well, now all of a sudden, youknow, I have all of these things
to cover.
I know what my profit is.
I know that's how you set yourprice.
Well, guess what?
Your training, your software,all of your different items have

(40:30):
to be worked in there.
And then like we've talkedabout, you have to make sure
that when you are pitching, youare delivering that value.
Uh, when I tell you that for meas there, there was two things
that I learned financially thatchanged everything for me and my
business, right?
And Ken will help you take theseto the next level.

(40:50):
But these were where theystarted for me.
They were getting a system likeprofit first in place to where I
had fixed numbers.
And then the other one that wasmagic for me in my business was.
I have a monthly meeting with mybookkeeper.
We sit down for an hour.
We go over where all the money'sgoing, we go over what our costs
are, we go over what'sdifferent.

(41:11):
And there's times where I go,well, hold on, hold on.
Why?
Why are we spending more in thiscategory?
What happened there?
But thanks to those two simplethings, I know how financially
healthy I am at any one point intime, and I have that grasp on
it.
And I believe, and, and Ken, I'mgonna tee you up.
Shameless plug for my cohosthere.
I wanna say your course isactually gonna cover a lot of

(41:33):
that on how to read thosereports, how to do those types
of things, how to do thosepricing.
So, and, and obviously I don'twanna turn this into a sales
pitch, but knowing that thoseare game changers, is there
anything there that you see askind of, other than buying
profit first and taking yourcourse, how does someone start
getting on track with that?
What's the, what's the stepthey're gonna take that's gonna

(41:55):
lead'em down the road to fix it?

Ken Lucci (41:57):
Well, I, I think it's very straightforward as a
business owner, if you arerelying on your accountant to
know your financial metrics,

James Blain (42:06):
Oh

Ken Lucci (42:06):
fail.

James Blain (42:07):
Toast.

Ken Lucci (42:08):
because you're toast.
Because the they, their job makeno mistake, is to calculate.
Profit or loss and tell you whatyou know for taxes.

James Blain (42:17):
Yep.

Ken Lucci (42:17):
are making a profit, they can't tell you how to
continue to double down and domore of what you're doing,
right?
If the, if you're, you'vecreated a loss, they really
can't tell you what's out ofwhack.
So to me, it comes down to one,knowing your gross profit margin
on every service you sell.

James Blain (42:37):
Yep.

Ken Lucci (42:38):
you are putting out a sprinter for five hours.
You better know incrementally.
How much does that sprinter costyou to put out?
How much are you paying yourdriver?
How much are you paying?
All of your expenses, repair,maintenance, et cetera.
And then what's your markup,right?
And your markup goal.
Should be somewhere north of 40%gross profit leftover.

(42:59):
Okay, so first of all, my fatherused to t taught me this.
You have to know the equation ofwhat it costs you to turn the
key in the morning.
So how much does your overheadcost you to maintain?
What is the overhead cost ofyour business?
Right?
How much it's like, you know,like tax free day.
It's how many days of revenue doyou have to have coming in

(43:21):
before you break even and coveryour nut?
Okay.
So to me that's, that'scritically important.
So I'd add up my fixed cost, I'dadd up everything.
It takes me right to maintain,keep the lights on, my
employees, my inside employees,what I call my, my overhead, my

(43:41):
people that are not generatingrevenue and know what my break
even point is.
But, you know, I, I've not, thisis what we do is pretty
complicated, but I can tell youthe first number that I look at.
I can tell you that dependingupon the size of the company and
the diversification of thefleet, I can tell you by looking
at one number once thefinancials are in our cost of

(44:06):
goods format, I can tell you ifI'm looking at the gross profit
margin, and it's not dependingupon di, the diversification and
size of the company either 30,35, 40.
Plus.
Plus plus of 30, 35, 40.
I can tell you those companiesare not making any, any money I
can if, if I walk in and I lookat a black car company and their

(44:29):
gross profit margin aftereverything is in our format,
tailored the right way, andthey're making less than 30%, I
don't even have to look at theiroverhead.
I know they don't have enoughmoney unless they're operating
seven days a week with nooverhead, they're doing it all
themselves.
Right?
I

James Blain (44:45):
Oh.

Ken Lucci (44:45):
there's not enough money left over to pay all the
overhead to associated withrunning a business.
Pay themselves above, I mean, aliving wage.
I mean, uh, pay yourself very,very well.
You are taking the risk as anowner and then have money left
over to make a profit.
I already know that the, thatthe business is in trouble.

James Blain (45:07):
Let me throw something at you though, Ken,
though,'cause I can, I canalready hear this from some of
the listeners, but Ken, youdon't understand and I get this
at Pax, right?
The reason I can't afford to dothat, the reason I can't have
newer vehicles.
The reason I can't invest intraining.
The reason I can't do that, man.
The margins on this business,man.
These numbers you're talkingabout, you must be talking about
huge.
You know, crazy secularbusinesses.
This is like a, a 5%, like 10%razor thin margin business.

(45:32):
Ken, there's so little to bemade, Ken, right?
What, what do you say to that?

Ken Lucci (45:37):
I can show you in every size company in this
industry, the million dollarcompanies, I can put$2 million
companies side by side in thesame market.
And I can show you one where theguy is making serious six
figures.
He's bought a building, he andhis wife take salary out of the
business, right?
And I can show you anothermillion dollar business, same

(46:00):
million dollars in revenue.
guy cannot afford to payhimself.
The guy's got the oldest fleetin the, in the area.
The guy is in a rented building.
He's approaching retirement age,and he's not paid himself W2 and

James Blain (46:14):
And this is the same revenue, right?
Same revenue, million tomillion.

Ken Lucci (46:18):
revenue, million to million.
You know the difference?
a low price in the market andone knows his value.

James Blain (46:25):
Right,

Ken Lucci (46:26):
one has his, his airport transfers are literally
25% lower than the next guy.
Okay?
So if you don't want to getgranular with your numbers, it's
real simple.
you would need to be in the topone third of anything that you
do, right?
And then you hope, then you hopethat you're, you're gonna have

(46:48):
enough money left over or.
You do what's called zero basedbudgeting.
It's simple.
Add up all your expenses, add upall the variables, and you, you
price based on knowing your costand defining that profit.
To me, the higher profit meansI'm a higher value individual.

James Blain (47:06):
Yep.

Ken Lucci (47:06):
Now, don't get me wrong.
When I started doing this job, Imean, I was taking on clients
for probably a 10th of what wecharge now, but then I decided.
I would rather, I would ratherdeal with less people, spend as
much time as I can with themthan on, and, and yes, add more
value to their business than israce back and forth.

(47:29):
And, and to try to deal withpeople and, and just to do a
volume play.
Everybody has that choice andthey don't think they do, but
everybody has that choice.
I'll go back to my originalclient.
My original client that, thatcame to me with that shuttle
contract.
He was Heming and Han.
He, he's in the top third ofwhat he charges in the market.
Top third, you go in any, if youprice any of his services, he's

(47:53):
a third hire.
He's got his own building.
He's got the best fleet in themarketplace.
He's got the best chauffeurs,the best reviews.
And he said to me, I don't thinkwe're gonna get this, Ken.
And I said, I don't wanna hearthat.
gonna first figure out.
What, how we have to price

James Blain (48:09):
Right.

Ken Lucci (48:10):
we're gonna give you, we're gonna give you the
elasticity.
Let's add up all your costs.
We're going to give you, here'swhat you could charge.
If you wanna make 25% grossmargin, I don't recommend it.
Right?
Here's what you can charge.
If you wanna make 30%.
Now, if you're gonna to do this,your strategy should be to
capture.

(48:31):
The executive travel for thatcompany.
So what does he do?
He goes in at the highest pricethat we calculated together and
he got himself a two yearcontract.
This same guy comes to me and hesays to me, um, I got another
phone call from a group ofprivate, private school, uh, uh,
private school parents and threeyears ago they asked me for
prices and they didn't go withme'cause they were too high

(48:52):
priced.
And, um, they just found outthat the guy that they're using
is running his equipment withoutinsurance.

James Blain (48:58):
Oh geez.

Ken Lucci (48:59):
Okay, so, so, okay, let's forget about three years
ago prices.
'cause now your cost structure'sdifferent.
We're gonna literally go, okay,here's from the office to, from
your base to

James Blain (49:13):
Yep.

Ken Lucci (49:13):
house.
This is your cost.
From that house to the second.
Picking up the second kid, thethird kid, the fourth kid, and,
and we literally, literallypriced it by the mile.
I said, here's your latitude.
You can go A, you can go B, youcan go C.
But remember something peopledidn't value you back in the
day, and they went withsomebody.

(49:34):
Remind them of that.

James Blain (49:35):
Yeah.

Ken Lucci (49:35):
So what is he?
He goes, he says, you know what,Ken, whether I get it or not, I
told him, this is what I have tocharge you because these, this
is why best equipment, bestchauffeur, criminal background
checks, uh, drug testing best,best reviews, uh, best loss run
and insurance.
Right?
I haven't spoken to him, but thewhole point is the guy, he knows

(49:58):
his worth.

James Blain (49:59):
Right.

Ken Lucci (50:00):
So I, while I feel bad for people when, when I'm
dealing with the, the guy thatdoes a million bucks who can't
pay himself and is dealing withold equipment, but that's the
person who says to me, but Ican't be low price, but I mean,
I can't go up in my price.
But, but, but even when I say tohim, there's a guy across town
he's making, he and his wife aremaking six figures.

(50:20):
They have a vacation home.
They're doing the same milliondollars.
You are the only difference.
their gross profit margin.
They're managing their overheadand they're paid money.
All it, it's a self-fulfillingprophecy.
If you are the lowest price inyour market, you're not gonna be
able to pay your bills.
You're not gonna be able tomaintain your equipment, you're

(50:43):
not gonna be able to payyourself well.
So this is the question I askwhen I, when I say.
When I, when I deal with anoperator who calls me at 60
years old and says, I need to, Ineed to sell my company to, to
pay my retirement, and thescenario is like the guy that's
never paid himself.
There's no value there.
It's a self-fulfilling prophecy.
If you make profit every yearalong the way, you are gonna

(51:06):
have something to sell If youmake and you pay yourself
better.
Then if you were out in theregular marketplace getting, you
know, doing the Monday throughFriday Jo nine to five thing,
you are gonna have something tosell at the end of the day.
But the other piece is you'vemade great profits along the
way, you don't, you, you arecreating wealth along the way.
You, if, if you are taking lotsof money off the table.

(51:30):
You are gonna be less concernedabout what you make when you
sell your business.
And I, I reject that.
And you know what?
I didn't have this perspectivein 2018 when I started this
because I, we, we've reviewed270 companies.
I can show you a$20 millioncompany that's not worth a dime
he's had to, his, his fleet isreally old.

James Blain (51:51):
Yep.

Ken Lucci (51:51):
refinance his fleet.
He's had, he has two or three,um, two or three lines of
credit.
Right Ken, I need to do anotherbudget because I, I, I've gotta
get another line of credit.
I'm not doing it with you.

James Blain (52:03):
Well,

Ken Lucci (52:04):
you are

James Blain (52:04):
yeah.

Ken Lucci (52:05):
doing what?
You're not doing the work.
Right.
So I can show you a$20 millioncompany that's worth much less
than a seven to$10 millioncompany who is chosen to, to
cooperate in the higher plane ofhis market.

James Blain (52:22):
Well, uh.

Ken Lucci (52:22):
chosen to pay himself good money and yeah, he, you
know, the secret with him.
He justifies his prices.
You know, he, he's dealing withthe same airport transfers that
you are, but he's marketing inwealthy areas.
He is creating relationshipswith 10 clients in and that
constantly use him rather thanPPC trying to generate a hundred

(52:45):
new leads a a, a month.
So it, it really is how youwanna live, right?
If you wanna, if you wanna, ifyou wanna turn your tables as a
restaurant on a Saturday night,if you wanna turn your tables
five times right, and just pushpeople through the door with
shitty food and do volume,that's great.
I, I'd rather turn the table twoor three times, making sure I've

(53:08):
served those people incrediblywell, making sure that they come
back constantly.
Constantly because of good wordof mouth rather than continually
constantly advertising for newclients because you're not
creating any value.

James Blain (53:24):
There's a couple things though, because this all
comes back down to havingsystems in place.
Because to that point, if youare going to provide that higher
level of service, you have tomake sure, right?
This is where I live.
You have to make sure your staffis trained, both in the office
and in the vehicle.
To do that, to have theconsistency, you have to have
the systems in place to manageyour financials.

(53:45):
And the one thing that we talkedabout in a previous episode was
you have to understand, right?
There's this, I heard this adagewhen I first got into the
industry.
If you wanna know how well acompany's doing, go in the
garage and look at how manyvehicles are out.
I will tell you I've learnedthat that's not as true now as
it used to be.
Because if I've got my vehiclesout running all night long and
I've got'em running all day longand I have a contract that is my

(54:09):
nights that I'm doing and I'mrunning it and I'm making no
money on it, one accident, oneinstant, one issue is gonna wipe
out every dime I made on it.
I would be better off findingsomething different to do or,
and in some cases, as crazy asthis sounds, there are companies
where you'd be better offletting the vehicle sit than
accepting that.

(54:29):
And so I think.
Understanding that we are at apoint where if you are looking
to run a company, anybody canrun a company.
Anybody can try and stay afloat.
You can be at the point whereyou don't make a dime on it.
But if you are listening to thispodcast, because you're one of
those operators that is saying,I want my margins to be the ones
that Ken's are talking about, Iwant to have that vacation home

(54:51):
look, I will share.
Right now, I have, I havefriends in the industry.
Then at one point we're lookingat selling their business and
then we went out to dinner at arecent show and they said, Hey,
you know what?
We were gonna sell the business,but we are getting enough money
out of the business to sustainour lifestyle, to keep us happy.
We've developed these greatleaders, we have great

(55:13):
leadership in place.
We have great systems in placeto where our involvement at this
point.
Is our how we want to beinvolved.
We work when we want to work.
We come in when we want to comein.
We get to have that companyalmost as a luxury, almost as
something great that we get todo.
And we took out more money lastyear than we ever have before.

(55:35):
You know, for us, it'ssustaining our lifestyle.
We get to almost have that as ahobby, and then when we do want
to exit, guess what we knowbecause of how it's running,
because of all those systems,because of everything there.
If we decide to exit, if wedecide to do something like
that, we're set up.
And so I think this takeawayhappens again and again and
again, but there's these couplethings, right?

(55:56):
Find yourself a mentor.
Put your systems in place, getthings figured out, and then
constantly develop the work onthat.
I think the only last thing Iwould say, and this was kind of
my big takeaway that I got fromthat same operator, is try to
overcome your limiting beliefs.
If I raise my prices, they'reall gonna leave me.
I have to be the cheapest.

(56:18):
Try to overcome these limitingbeliefs you have, and from
there, allow yourself to grow.
So the business can grow.
You know, I can't think of abetter thought to really end
this on other than if you weretrapped in this volume rat race.
It's a limiting belief.
You don't have to be.

Ken Lucci (56:37):
it, it's, and I feel bad because they don't see their
self worth, right.

James Blain (56:40):
Yep.

Ken Lucci (56:41):
for someone to call them on a Sunday to interrupt
their family and.
To say, listen, I, I, I need aride to the airport at four,
four o'clock in the morningtomorrow.
Okay?
At the end of the day, if that'swhat they, if that's gonna
happen, you're gonna pay me,you're gonna pay me, or you're
gonna pay whoever I have to pay.
You're gonna have to pay us somepretty good money to guarantee

(57:03):
at 3 45 tomorrow morning thatvehicle's gonna know your worth,

James Blain (57:07):
Yeah.

Ken Lucci (57:08):
I wouldn't be this adamant if I just didn't see the
contrasting, the contrasting,companies.
You know, the, I, I'm thefamous, the tale of two
companies,

James Blain (57:18):
Yep.

Ken Lucci (57:18):
and it's, if you, if you feel you have to be the
lowest price in town, you're,it's a self-fulfilling prophecy.
You're always gonna suffer fromcash flow problems.
You're all, you're not gonna beable to fix your vehicles when,

James Blain (57:30):
It's everything.
Accident, safety, money.
It bleeds to all of it.

Ken Lucci (57:36):
A hundred percent you should strive to be in the top
10%.

James Blain (57:40):
Yep.

Ken Lucci (57:40):
and we've had a lot of those people on the, on the
podcast and you can't say thatwe're not trying to provide
value.
That's for sure.

James Blain (57:48):
Well, and I think the other thing is, you know,
I've, I've heard people's, well,if everybody was in the top 10%,
who's gonna take the bottom?
Rising tide lifts all boats,right?
If every single person intransportation said, we're gonna
step up the game, we're gonnastep up what we're gonna offer,
if everybody did that, guesswhat?
The entire market's pricing isgonna rise up.
It's not like one company outthere was like, well, we're

(58:09):
gonna charge more for eggs andwe're gonna be, no.
The whole industry had theircosts go up, had everything go
up, and now eggs are what eggsare, right?
You see that in industries allthe time.

Ken Lucci (58:19):
What's gonna happen is there's gonna be a lot of
successful people laughing atthe ones who've got the shitty
reviews because their vehiclesbreak down and they're arguing
with customers and they get 1.9reviews.
And that's what you're gonnahave.
And it, I mean, it, it's, youknow, Steinberg has said one
thing that made a lot of sense.
Winning is the number one thingto me after breathing, after

(58:41):
breathing.
And if I'm gonna do this, I'mgonna be in the top.
If you're not in the top one,two, or three win place or show,
it doesn't matter what, whereyou are.
'cause the view's always thesame.

James Blain (58:53):
Right.
Why show up if you're not aimingfor the podium?

Ken Lucci (58:57):
yeah, absolutely.

James Blain (58:58):
So,

Ken Lucci (58:59):
All right.
Well this was another excitingepisode of the Ground
Transportation Podcast.
The place where you can go everysingle week for the best
continuing continuing educationin the industry.
We don't charge you, we don'tmake you go get a hotel room.
Great entertainment.

James Blain (59:14):
uh.

Ken Lucci (59:14):
entertainment.
And um, we wanna leave you witha few things.
If you've got any suggestions,

James Blain (59:20):
Absolutely

Ken Lucci (59:21):
Go to what's the website,

James Blain (59:23):
Ground transportation podcast.com or
Facebook, Twitter, groundTransportation podcast.
Yep.

Ken Lucci (59:31):
visit pack training.
Or visit driving transactions.
Give us your suggestions.
Tell us what you like.
Tell us what you don't like, andwe're gonna keep doing what
we're doing.
Thank you for listening to theground transportation podcast.
If you enjoyed this episode,please remember to subscribe to
the show on apple, Spotify,YouTube, or wherever you get
your podcasts.

(59:51):
For more information about PAXtraining and to contact James,
go to PAX training.com.
And for more information aboutdriving transactions and to
contact Ken, Go to drivingtransactions.com.
We'll see you next time on theground transportation podcast.