Business # 2 - Highland Tour Company Ltd...

My plans for Business no.2 are well underway. As given in the rules of 'The Challenge', each business needs to be in a distinct industry, so don't be surprised at the sudden change of tack. I want to open a tour company. Specifically, a Highland Day Tour company that runs from Edinburgh. Starting a tour company is a huge undertaking, however, and it's something I can't do by myself. Therefore, I've had to draft in a business partner for this one. Firstly, there are qualifications that you need which I don't have, namely transport manager qualifications. Secondly, you need someone with a lot of experience within the industry. Personally, I have 3 years experience of working within a tour company as a tour guide, so I've seen it from the inside and could see the problems that the company faced and also their glaring inefficiencies, mostly stemming from office staff and bureaucracy (as is almost always the way!). But my partner in this venture has over 10 years experience as a driver and tour guide working for 3 different companies, as well as having the proper qualifications in order to run it. We'll call him 'David'.

David has a drive to do things properly, whereby we focus on the customer experience rather than the bottom line. Ironically enough, businesses that do this often experience an upturn in their bottom line. The tour business in Scotland is stagnant, run by a cartel of men who have no interest in innovation and simply enjoy the fruit of businesses that could be run so much better AND cheaper. We intend to shake things up, as you'll soon see.

So, what's the USP (Unique Selling Point)? Well, we intend to run our tours for FREE. Yes, you read right. FREE. How can this be so? Well, I'll get to that in a minute, but for now, just imagine the huge marketing implications for the company. How easy is it to attract someone onto a free tour in comparison to trying to get someone to stump up £30+? Well, "we don't know" is the answer, but we suspect it's also "very easy".

So, how could we run the tour on a free basis? Well, we intend to charge the experienced driver-guides a fee for each passenger on their bus, rather than pay them. Yes, again, you read right. You see, these guys will be working on a 'tips only' basis. This means that people will tip them at the end of the tour based on how much the tour was worth to them. Everyone we've spoken to about this has said the same thing. "Fair enough". Now, we don't imagine the average tip will be £30+, so we have to cut our cloth in other ways compared to the regular companies. They have expensive premises and lots of overheads, which we won't have. We will run as a 'virtual company'. We will have as little paperwork as possible, meaning we have no need for office staff. The word 'free' will do most of the marketing for us, so we won't have to pay for that. Neither will we pay any commissions to agents; as is the norm for most companies, in the region of about 25% of the cost of a £30+ tour. Finally, the buses. We will be using older, but safe and perfectly-roadworthy coaches. The tour industry in Edinburgh at the moment is a vanity project, the companies are racing to see who can have the newest fleet, which costs a LOT of money. You can buy a great coach seating 25-30 people for around £15,000, albeit it's 10 years old. A new one will cost in the region of £150,000+. You can be assured the older coaches are in good nick because they have to go through a monthly test, each and every month, like an MOT for cars, to make sure they are roadworthy. Basically, they have to be in good shape. People have no interest in the age of coach, only about the comfort and roadworthiness of the vehicle. In this credit crunch climate, we don't anticipate any problems attracting customers, but we need to make sure that the driver-guides receive enough in tips to make this work. That's why we intend to run a trial in February.

So, we'll be running a virtual company with older coaches and paying no salaries whatsoever. You can imagine how low our cost-base will be in comparison to our competitors. AND we have a huge marketing advantage; Our tours are FREE! If you enjoy the tour, tip your guide, if not, don't! It puts the power back in the hands of the customer, and customers LOVE that in my experience.

I won't go into the figures of what we expect to charge or what the sort of average tip we expect is, as that would give away a lot of our 'trade' secrets. We will be the first company to try this in Europe, so it's pretty groundbreaking stuff. City walking tour companies; such as Sandeman's New Europe, have been doing this for a few years, but no one has been willing to do it with coach tours, until now.