In this second installment of our three-part series, “Keys to Success,” Gil Amado, president of 1st Choice Ambulette in Mineola, N.Y., shares some thoughts gathered over his 28 years in the business. Gil’s company has 60 employees and 40 vehicles averaging 500 trips a day, and he goes in-depth on some things you really need to focus on to help your NEMT business survive and be successful. In his words:
Vehicle Maintenance
Equipment servicing is one of the most critical things you can do. As my mother used to say, “An ounce of prevention is worth a pound of cure.” When your livelihood and your entire business is on the road, and literally every minute that you are using a vehicle you’re generating revenue, your vehicles have to be perfect, and you have to spend the time to maintain them.
Preventive maintenance is really the key to running a successful transportation company, and sticking to it. Oftentimes it’s the difference between being successful and not. Because a breakdown, or a vehicle that has to be in the shop for a day or two for service—that downtime kills you.
And as your fleet scales, there’s a break-even point where it makes a lot more financial and operational sense to open your own garage and do your own maintenance. Here in New York, that’s around 15 – 20 vehicles.
Hire a mechanic, get a garage, get a lift, get some tools, and stock frequently replaced parts like air conditioning compressors, condensers, certain filters, hoses. That’s a game changer, because that means a vehicle is not sitting in the garage waiting for a part delivery.
The Value of Verifying Data
There’s a big issue with data quality: addresses, phone numbers, dates, times. All the critical components that make up a trip—besides the actual execution of it—have to be accurate. So verifying the data is really where you can get your efficiency and get a lot of value and help you be more profitable.
We have a call center that calls every single transfer before we go. We verify that they’re at the address that we have on file for them. Because people move and they don’t tell us, or sometimes they don’t tell their insurance company and the insurance company sends a pickup from their old address.
We often ask them, “Do you think you’ll be there all day? Is it an appointment? Is it quick?” We’ll ask them if they’re slated for a wheelchair transport. For instance, we’ll say, “Are you in a wheelchair?” Because sometimes they’ll say, “Yeah, I am but I need one because mine is broken.” And we’ll provide one. All these little things that we do ahead of the trip allow us to be a lot more efficient, eliminate the no-shows, and do more work, because our drivers aren’t having to do that in the field.
Efficiency, Billing, and Automation
One of my partners has a Ph.D. in route optimization. So having him develop all of our algorithms, running routes, and using real-time route optimization has been a game changer for us. And we also have a couple of really good data scientists.
For a rural company, maybe it’s not as important. But in parts of Queens [N.Y.], it’s very important. If you make a left instead of a right, it could take you an hour to get back to where you were. That kind of control and route optimization and driving directions and all that stuff is important.
Automation is key; billing automation is very important. Costs are so high and margins are so thin that we can’t be happy with less than 98% collection. So it’s very important that you have good billing partners.
And don’t wait until you’re bigger, don’t wait until you have a problem. If you’re doing it yourself, it’s going to inhibit your growth. As a TP owner, the more you do hands on, whether it’s driving, dispatching, billing, turning wrenches in the garage—whatever you do—the more it will inhibit your growth. When you give up some of the responsibility and delegate it to somebody who, quite frankly, is probably better than you at it and solely focused on that task, it will allow you to do the one thing TP owners should always be doing: growing your business, adding vehicles, hiring more drivers, and trying to get more work.
Seasonality
In the Northeast, a lot of the older population goes someplace warm for the winter. Knowing that you’re going to be quieter in the summer, it’s a good time to send drivers on vacations. You’ll need three days to do a transmission or swap an engine; that’s the time to do it.
In the summer, on older vehicles, it’s guaranteed that at least one air conditioner is going to fail—on the hottest day of the year. If you do in-house service, make sure you have the refrigerant in stock. I would recommend that companies buy that refrigerant now. My understanding is that it’s going to almost double in price in August.”
The Final Key: Systems
Delegating is very hard for small business owners in general, and especially transportation company owners, but you have to. The easiest way to do that is using systems. Every single one of my employees, me included, builds a playbook for our roles. We share that playbook in a central, Google Drive document. So if somebody’s out or they quit or I fire them or they go on vacation or they can’t work or they have a medical appointment or they’re FMLA, it’s pretty easy for all of us to pick up the slack for that other person. Because they’ve documented their processes in a system.
We have a system for everything, from onboarding new drivers, to putting a new vehicle in service, to submitting a claim, to getting new customers, getting new clients, new contracts, all that stuff is all systemized and all documented. And that document is a living document. We constantly go in there and edit it and update it and change it. I think that what’s helped me grow to this point: my systems, my documentation, and my people. I do have good people.
Next month will be the final installment of our three-part series, “Keys to Success”. Stay tuned to read from another top TP and their tips on staying successful in this business. Subscribe to one of our TP-only social channels to see the latest news specifically for transportation providers.