Budgeting & Cost Input

Budgeting Guidelines

It is important that before you start determining your prices for the rides you will know how much you will need to earn on average to cover your yearly costs. The easiest way to find your cost input formula is to follow some of our budgeting guidelines. It would not only provide you with the parameters but also enables you to follow a performance in terms of cost and return throughout the period. 

If you have some data from the last 12 months you could use that for the following estimations. If not then you have to use industry and area based averages. 

Vehicle estimations

First thing you would like to do is to understand your vehicle’s seasonal behaviour over the last 12 months considering also seasonality if applicable. You will need to know how much was your vehicle in use in terms of mileage and time in any particular month. The usage of your vehicle is a key factor and base for all the other calculations you need to do. 

You can go as specific as an individual vehicle or if you have several vehicles then you can group them by size. You can use the speed to validate the correctness of your input. 

Example of the vehicle parameters input for one 49 seater tour bus. 

Vehicle size	January	February	March	April	May	June
Avg mileage km/month 45-51 seats	4000	3500	6500	8300	10500	12500
Avg time in use h/month 45-51 seats	90	75	115	140	160	178
Avg speed km/h 45-51 seats	44	47	57	59	65	70

Avg mileage

Is the total mileage that the vehicle does during the month including rides with and without customers. It is the odometer display in the beginning of that month and the end of that month. 

Avg time

Is the total time the bus has been used during the month including rides with the client and without the client. It is the time while the vehicle has been in active use.

Avg speed

Is calculated dividing the average mileage with the average time

As said before it would be easier to fill this information if you have the data from the previous years so you would recognise some patterns. It is simpler if the vehicles would do some regular type of work and have a constant amount of mileage guaranteed each month. It is trickier with the charter buses where you need to know also how your market and clients will behave. In the example above we can see that in the first quarter there is tendency for longer customer hours and less kilometres meaning that the rides are typically in close proximity but people like to keep the bus stand by. Good example is a “City hire” for 6 hours where the bus is waiting for the client most of the time during the order. In the second quarter the usage changes and the bus is now doing longer tours where average mileage per day can be up to 500 km. For the larger buses the average speed will stay normally under 80 per/hour.  

If the foundation is in place then the next step is to find out about the costs which are shown in the following table.

Vehicle size	January	February	March	April	May	June
Avg fuel consumption l/ km 45-51 seats	0.31	0.32	0.30	0.29	0.29	0.27
Avg fuel price eur/ l excluding VAT	1.8	1.8	1.6	1.5	1.4	1.4
Fuel cost eur	2232	2016	3120	3611	4263	4725