Toll road total fail

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http://www.bbc.co.uk/news/uk-30085749

A villager tried to cash in from a temporary road closure, but got his maths wrong... Oh dear, he could let people use it for free and break even, or do nothing and break even. Luckily the budget is set to receive £45k in VAT; that'll teach such entrepreneurs.
I just love seeing tolls collapse :)
 
I know the area and watched this with some interest...he was brave to stick his neck out so much and I wondered how he might have got on.
 
I don't believe for one second he'll make a loss.
 
neil_g said:
Am I missing something? It doesn't sound like he was aiming to make a profit.
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Nope, he was providing a useful and needed service for people who normally used the main road and otherwise faced a substantial detour.
 
neil_g said:
Am I missing something? It doesn't sound like he was aiming to make a profit.
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He just tried not to sound greedy on a national TV. Of course he must have been aiming to make a profit, otherwise he would have set it free and incurred almost NO expense. Why did he have to have it staffed 24/7? Clearly 90% of customers went in daylight and dusk, and he was making a massive loss at night. It's a great lesson for many startup businesses - do your maths and market analysis first!
 
daugirdas said:
http://www.bbc.co.uk/news/uk-30085749

A villager tried to cash in from a temporary road closure, but got his maths wrong... Oh dear, he could let people use it for free and break even, or do nothing and break even. Luckily the budget is set to receive £45k in VAT; that'll teach such entrepreneurs.
I just love seeing tolls collapse :)
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Sorry but it was not so.

He owned the land a short way from the site of a serious landslip. So serious that it closed an A road and initial estimates sugeested a 3 week closure, then 3 months then a year.

The landowner has 3 shops in Bath's Market Hall and the road closure meant a long detour to get to his business as did his neighbours.

So he created his own link across his land linking 2 public roads allowing access to the Bath side of the closed roads. He paid for the clearance of the strip, the stone underlay and for a tarmac top layer. He paid for proper line painting and signage.

The fee he charged was designed to cover the costa and was annualised for the coucil's 12 month repair schedule against daily usage. In the end the repair work came in at 10 months (ie 2 months early) and was reopened at 6am yesterday Monday 17th November.

The landowner was interviewed on local radio and Radio 5 Live early yesterday just after the main road reopened. When asked about the finances involved, he stated the toll fee was designed to cover costs over the 12 months and that the early finish would lead to his suffering a loss of £15K. He also stated that he was commencing reinstatement of his land and hoped to offset the shortfall by selling on the stone underlay.

The radio interviewr spoke to neighbours who praised the building of the temporary road as it removed the potential delays via the official detours.

If you do not know the area, local roads are cut into steep hillsides and there have been quite a few landslips around the region due to soil and tree displacement from last winter's heavy and constant rainfall. A fairly large one occurring on the Wells to Bristol A37 near to Pensford caused some serious hold ups as new retainer walls and concrete pilings were installed.

So no, the guy who dealt with the road losure was not profiteering and, having used the toll myself, it was a useful solution that thd LA refused to assist with which left 10 months of drivers getting stuck on official detours.... and if entrepreneurial intervention helps then good luck to the guy. He made sure that his 20 minute journey did not turn into a 70-90 minute slog to get to his place of work, the same as the regulars. No greed here.

Steve
 
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daugirdas said:
Oh dear, he could let people use it for free and break even
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Ok maybe Im having a bad morning here but what part of spending £150000 to have a temporary road built then letting people use it for free means that you break even!!!???

Maybe you should check your maths out instead.
 
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stupar said:
Ok maybe Im having a bad morning here but what part of spending £150000 to have a temporary road built then letting people use it for free means that you break even!!!???

Maybe you should check your maths out instead.
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Think he meant break even with the running costs not the construction.
 
daugirdas said:
He just tried not to sound greedy on a national TV. Of course he must have been aiming to make a profit, otherwise he would have set it free and incurred almost NO expense. Why did he have to have it staffed 24/7? Clearly 90% of customers went in daylight and dusk, and he was making a massive loss at night. It's a great lesson for many startup businesses - do your maths and market analysis first!
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free? how would he have paid for the £150k road? how would he pay for staff?

it sounds to me like he genuinely never expected to make a profit and had worked out to break even. he's got a £45k tax bill coming ffs.
 
ecoleman said:
£150000 running costs? Would love to see the breakdown
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Why

The whole cost included construction as well as running costs

Suvh cynisism!

Do you live nearby and been affected by the closure of the main road?

What the guy did made a positive contribution to the lives of the local people

Use J F K's belief and value system enunciated in his inaugural address in 1960:

"And so, my fellow Americans: ask not what your country can do for you, ask what you can do for your country."

Steve
 
ecoleman said:
£150000 running costs? Would love to see the breakdown
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well he did say 2 x operatives 24 hours a day at £10 per hour

2 x 2 operatives 24 hours a day @ £10 per hour = £480 per day = £14,400 per month x the 10 month it has been open = £144,000 plus insurance etc, etc
 
ecoleman said:
£150000 running costs? Would love to see the breakdown
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Minimum wage of £6.50, with a 24x7 operation is over £1k a week in wages alone. If he ran that for 10 months that's £45k alone

Ah beaten to it...
Gary Coyle said:
well he did say 2 x operatives 24 hours a day at £10 per hour

2 x 2 operatives 24 hours a day @ £10 per hour = £480 per day = £14,400 per month x the 10 month it has been open = £144,000 plus insurance etc, etc
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Hugh Jarse said:
Why

The whole cost included construction as well as running costs

Suvh cynisism!
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yes but the whole cost was 300k - running costs were 150k

I don't think he was profiteering but he didnt think it through, i doubt leasing an automated barrier would have cost that much - or for that matter he could have staffed it in busy periods and had an honesty system during the night
 
big soft moose said:
yes but the whole cost was 300k - running costs were 150k
I don't think he was profiteering but he didnt think it through, i doubt leasing an automated barrier would have cost that much - or for that matter he could have staffed it in busy periods and had an honesty system during the night
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His main purpose was so he and his neighbours could get to work without being stuck in the jams caused by the diversion towards Bristol. Having to go towards Bristol then double back added up to an hour to the journey. His shops are his main business and so he sorted an issue.
So what if he charged a fee for others to use his land. No one was forced to use it and he personzlly bore the brunt. I used it a few times as it saved me a lot of time that would have cost fuel and client charges as I would not be able to add that to my invoices.
He stated his break even plan, as stated in my earlier post, was based on a 12 month closure which came in at 10 months. So a lot of variables and sometimes you take a punt in any business.
I wish I knew how many business experts were on this forum. I would have commissioned them to come and work for me. I had 18 Associate Consultants working for me and decided to retire and sell the client list to another consultancy because I struggled to find the tight calibre of people.... who knew they were under my nose here on TP...

Might be worth having a job market thread here? (Seriously) LinkedIn yielded 2 applicants from Canada.
 
Hugh Jarse said:
sometimes you take a punt in any business.
.
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Indeed - though you don't usually lay out £300k without at least carrying out a basic cost/benefit analysis - you don't have to be a business expert to realise that paying two people 24/7 is not going to be sustainable for a road thats only busy at peak times.

If his prime motivation was to save the loss of profits from his shops, and to allow convenient travel for his freinds and neigbours, he'd have been better off with an honesty box system and saving £150k
 
big soft moose said:
Indeed - though you don't usually lay out £300k without at least carrying out a basic cost/benefit analysis - you don't have to be a business expert to realise that paying two people 24/7 is not going to be sustainable for a road thats only busy at peak times.

If his prime motivation was to save the loss of profits from his shops, and to allow convenient travel for his freinds and neigbours, he'd have been better off with an honesty box system and saving £150k
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There you go

You are an expert at business....

You can determine business effiviency, COBA and Profit/Loss trends (in all likelihood) from scant information. Ideal consultant material from my experience of some of the top companies in the field....
 
Hugh Jarse said:
Why

The whole cost included construction as well as running costs

Suvh cynisism!

Do you live nearby and been affected by the closure of the main road?

What the guy did made a positive contribution to the lives of the local people

Use J F K's belief and value system enunciated in his inaugural address in 1960:

"And so, my fellow Americans: ask not what your country can do for you, ask what you can do for your country."

Steve
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Urm.........calm down dear!!!!
I was just questioning £150,000 running costs. I never said he shouldn't have done it.
 
Gary Coyle said:
well he did say 2 x operatives 24 hours a day at £10 per hour

2 x 2 operatives 24 hours a day @ £10 per hour = £480 per day = £14,400 per month x the 10 month it has been open = £144,000 plus insurance etc, etc
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Well that wasn't very smart. He probably could have gotten away with minimum wage or even living wage and would certainly not need two operatives 24/7
 
This is one of those delightful stories you can spin any way you want to make any point you like.

1. Greedy profiteering land owner left red faced as sums don't add up.

2. Plucky entrepreneur finds himself defeated by council's red tape and crippling tax bill

3. Local businessman generously builds a private road so local businesses can continue despite roadworks fiasco

4. New evidence that special forces murdered poor dear dead Diana. You won't believe where they buried her!

He gambled, he lost. He seems OK with it. He created a few jobs and made a lot of people's lives a bit easier with what turned out to be his own money. Seems like a nice guy actually.
 
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Hugh Jarse said:
Ideal consultant material from my experience of some of the top companies in the field....
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well i'd be happy to both con and insult you if thats your desire :lol:

but seriously you don't have to be either a business expert or a rocket scientist to realise that running 2 manned tollbooths 24/7 on anything less than a motorway is a bad idea (come to think of it i'm not sure even the M6 toll has manned booths round the clock)
 
i'll just leave this here and be on my way (hopefully not via a pesky toll road..)

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ecoleman said:
And still £100,000 unaccounted for.
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2 people 24/7 at £10 per hour (according to the article) = £3360 per week , for 40 weeks = £134,400 , plus 20% for on costs £26,880 - so £150k isnt far off (in fact its probably low as presumably he'd also have repairs, electricity and such)
 
Also isnt the 45k vat bill a bit of a red herring as he should be able to reclaim about the same on his capital costs ?
 
big soft moose said:
well i'd be happy to both con and insult you if thats your desire :lol:

but seriously you don't have to be either a business expert or a rocket scientist to realise that running 2 manned tollbooths 24/7 on anything less than a motorway is a bad idea (come to think of it i'm not sure even the M6 toll has manned booths round the clock)
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I was being serious. I used to back up some of the big companies and they would take somebody with a georaphy degree and trajn them as accountants. Then they would be consultants.

My company only got paid by results. We never failed to drive our clients into a stronger place so always got paid.

I closed the business because I could not take it further because the pool of potential employees just never got through interviews so I closed it and my associates went to a variety of consultancy companies

IF you had appeared for interview and understood the basics of business as detailed you would have been called for full interview which would test the other attributes needed including writing skills personality and presentation. So no I was being serious in what I said above.

Profit/Loss is something still not properly taught at an early age.
 
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I'm a head of department for a National Trust property ( all views expressed are my own blah blah blah) so I have quite a diverse job which includes being able to understand and formulate business cases, profit and loss, cash flow/ budget sheets etc ... its not all cutting down trees and hugging bunnies. ( in fact i havent hugged a bunny for ages - they bite)

I'm also about a third of the way through an MBA ( I stalled for lack of cash to pay the course fees)

While becoming a consultant is an interesting idea ( I'd certainly get paid a lot more) I suspect my lack of tollerance from corporate b******t might be a barrier ;)
 
big soft moose said:
I'm a head of department for a National Trust property ( all views expressed are my own blah blah blah) so I have quite a diverse job which includes being able to understand and formulate business cases, profit and loss, cash flow/ budget sheets etc ... its not all cutting down trees and hugging bunnies. ( in fact i havent hugged a bunny for ages - they bite)

I'm also about a third of the way through an MBA ( I stalled for lack of cash to pay the course fees)

While becoming a consultant is an interesting idea ( I'd certainly get paid a lot more) I suspect my lack of tollerance from corporate b******t might be a barrier ;)
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There is consultancy and there is faux consultancy. Many moons ago I worked in a very well known merchant bank and after my first year I found I had a personal training budget which covered the cost of an MBA. So I did the course and found my job and salary elevated. The value of the MBA is in the wide exposure to macro business issues. Springboard across wider plains.

Is there no incentive (or budget) within NT to assist with the cost of your MBA?

Consultancy is a useful piece of work when it adds value to the client and to the cosultant. It is a job of nil value if the client wants mere validation of internal ideas.

I went from aerospace engineering to merchant banking and so brought a wider skillset to my MBA course. With what you are doing as a job the MBA will slot together.

Your lack of tolerance for BS is an inhibitor but the way round it is to see through the time servers, find and fix the obvious and see how big the difference is when you crack the indifference of the sheep in your clients' business.
 
big soft moose said:
well i'd be happy to both con and insult you if thats your desire :LOL:

but seriously you don't have to be either a business expert or a rocket scientist to realise that running 2 manned tollbooths 24/7 on anything less than a motorway is a bad idea (come to think of it i'm not sure even the M6 toll has manned booths round the clock)
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Quite right. You don't have to be a certified "consultant" to add up basic expenses, evaluate best and worst case business scenarios and off-set natural greed and expectation of jackpot in the field with a well-thought conservative plan. It is obvious those numbers barely work in the very best case scenario.
 
Hugh Jarse said:
There is consultancy and there is faux consultancy. Many moons ago I worked in a very well known merchant bank and after my first year I found I had a personal training budget which covered the cost of an MBA. So I did the course and found my job and salary elevated. The value of the MBA is in the wide exposure to macro business issues. Springboard across wider plains.

Is there no incentive (or budget) within NT to assist with the cost of your MBA?

Consultancy is a useful piece of work when it adds value to the client and to the cosultant. It is a job of nil value if the client wants mere validation of internal ideas.

I went from aerospace engineering to merchant banking and so brought a wider skillset to my MBA course. With what you are doing as a job the MBA will slot together.

Your lack of tolerance for BS is an inhibitor but the way round it is to see through the time servers, find and fix the obvious and see how big the difference is when you crack the indifference of the sheep in your clients' business.
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Put it this way as team leader my budget for CPD for the team is considerably less than the cost of an MBA - the EBS MBA that I am working on is 875 per course (9 courses required for the full award) - I somehow doubt that it would be good leadership to spend all the team profesional development money on myself :LOL:

things is different in the charity sector - pretty much if I want it i'll need to pay for it myself (my plan is to scrape together enough to complete 3 courses , gain a post grad certificate in busines administration - then use that as a lever to get promoted, and then use the increased salary to complete the other 6 and get a full MBA)
 
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daugirdas said:
Quite right. You don't have to be a certified "consultant" to add up basic expenses, evaluate best and worst case business scenarios and off-set natural greed and expectation of jackpot in the field with a well-thought conservative plan. It is obvious those numbers barely work in the very best case scenario.
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indeed - if he got a 45k vat bill his total take must have been £225k (or30k profit after the expenses and Vat - which is a 20% return on the 150k invested - that wouldnt be too bad if the £150k asset retained its value , but of course in this case it doesnt, with the A road open the asset is virtually valueless )

What he needs here is a clever accountant who can find a way of writing down the loss of asset against the profits from his other businesses (he ought to also be able to reclaim the VAT on the construction which ought to go someway to off setting his vat bill)
 
big soft moose said:
Put it this way as team leader my budget for CPD for the team is considerably less than the cost of an MBA - the EBS MBA that I am working on is 875 per course (9 courses required for the full award) - I somehow doubt that it would be good leadership to spend all the team profesional development money on myself :LOL:

things is different in the charity sector - pretty much if I want it i'll need to pay for it myself (my plan is to scrape together enough to complete 3 courses , gain a post grad certificate in busines administration - then use that as a lever to get promoted, and then use the increased salary to complete the other 6 and get a full MBA)
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Its been a while but the Open University ran quite a respected MBA course. Was seen as the cheapest way to do an MBA.

Steve
 
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