Most operators guess when it comes to pricing.
They copy competitors, ask around on Facebook, or just wing it. Big mistake.
In this presentation, Ken Lucci explained why every operator needs a profit equation.
Whether you have one sedan or a fleet of 50, knowing your exact costs and margins is the difference between running a hobby and running a business.
Why a profit equation changes everything
The wrong way to set your rates
What a winning business looks like
In this article
Why a profit equation changes everything
Every vehicle you own has a daily cost, even if it never leaves the garage.
For one Volvo S90 example, Ken showed it’s $88 a day just to sit there, plus 80¢ a mile.
So if you’re not building your pricing off the real math, you’re bleeding cash.
What should your target be?
At least a 40% gross margin across your fleet.
Anything less and you won’t cover overhead, pay yourself, or see true profit.
The wrong way to set your rates
Forget Facebook posts. Forget copying competitors. Forget “a buddy in the business told me…”
Why?
Because nobody else has your insurance costs, your overhead, or your staff setup.
Copying their rates is like playing darts blindfolded.
The right way is simple: calculate your true costs, then add at least 40%.
That’s how you stay in business.
Keeping overhead lean
Ken says overhead should max out at 20 to 25% of revenue. That’s it.
Too many operators let fixed costs eat them alive.
The solution? Scrutinize everything.
Cut what doesn’t drive revenue. Outsource smart. Go remote if it fits.
And if you’re spending on marketing, make sure it’s actually bringing in paying clients.
What a winning business looks like
Ken talked about an operator who grew from $558K to $753K in one year.
Cost of goods sat at 60%, overhead at 24.5%, and net profit hit 15%. That’s above the industry target of 10%.
Why? Because revenue grew and profit grew with it. That’s the equation you want.
Here’s Ken’s no-fluff advice:
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Review your P&L monthly. Not just at tax time.
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Charge more for charters and late-night jobs. They’re not airport runs.
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Don’t let vehicles sleep on weekends. Weddings, nights out, special events… fill those hours.
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Use tech to cut costs and look bigger than you are.
Profit is about choices. Small ones, made consistently, that add up.
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