Month: December 2013

Interview: Electric Car Rentals

Introducing Electric Car Rentals

Electric Car Rental Primary LOGO(blue wheels)-01 copy

Today’s post interviews Kieshelle Mcknight-Cummins from Electric Car Rentals, a new car rental company in Barbados with an ambitious mission: to be the regional leader in green transportation by providing 100% eco-friendly vehicles for rent to tourists and residents.  The company only offers electric or hybrid vehicles with zero or ultra low carbon emissions.  This is a game changing move in a region that is embracing the ideas of a green economy and sustainable tourism.

 

Congratulations on the launch of Electric Car Rentals. Tell us a bit about your company and what gave you the idea to launch an electric car rental company.

The Electric Car Rentals dream was born while considering the amount of fossil fuels we consume as a small Island nation.  We spend approximately US$400M in fossil fuels each year.  This is a big and worrying number for an economy as small and open as ours.  Our natural response would probably be to say “that’s the Government’s problem…not ours”.  However, it’s a national problem that needs to be addressed by all of us.

Transportation is a big contributor to consumption and we thought that we should address this sector.  Electric Car Rentals seeks to make a dent in consumption by renting electric or extremely fuel efficient cars.

 

From the website it seems that you are aiming at tourists, can residents of Barbados also rent electric cars from you?

Absolutely!  Our cars are available for anyone who wants to experience something different.  They are not only fuel efficient and environmentally friendly, they are fun to drive!

 

I know it’s still early days, but how has it been received so far?

It has been a very interesting experience.  We anticipated some level of curiosity and maybe some scepticism.  However, our product has been greeted with great enthusiasm.  Watching some persons drive an electric car for the first time is like watching a kid at Christmas!  We hope this level of interest sparks a change in the way people think about the environment and what they can do to make a difference.

 

On electric cars

We’ve been hearing quite a bit about electric cars in recent years but I still find it a bit confusing. Do you plug in the cars? How does this work?

The two more recognisable types of electric cars are those powered by an external electrical power source (Plug-In) and those powered by an on-board electrical generator (Hybrid).  We are now beginning to see plug-in vehicles being more accepted by the market – The Nissan Leaf is a popular brand.  However, people are more familiar and accustomed to the Hybrid.

Toyota Prius C 2013

The Hybrid uses a combination of battery power and the conventional internal combustion engine to power the vehicle.  The vehicle alternates between electric power and engine power depending on your driving style or the terrain.  What’s fascinating about the Hybrid is that the combustion engine powers the battery, which means that you NEVER have to manually charge or plug-in the car.  Once driven the battery is charged automatically.  Hybrid Synergy Drive by Toyota takes it even further by capturing the energy from braking to also charge the battery.  Efficiency at its best!

 

What do you see as the advantage of renting electric cars compared to renting conventional cars?

The immediate benefit to people is the very noticeable savings on gas.  For the Plug-In, you don’t need gas at all and for the Hybrid you need very little of it!  With gas prices being as volatile as they are, it pays to drive an electric vehicle.

However, the longer term benefit is your impact on the environment.  For a tourism based economy, we depend heavily on the beauty of our environment to earn foreign exchange.  The moment our air quality deteriorates to the point where people have difficulty breathing, we will have a huge problem on our hands.  Electric cars offer zero or ultra low emissions.

In summary, you can help preserve the environment, save money, and drive a cool Prius all at the same time!

 

Are there any other differences that you believe people need to be prepared for when they first drive an electric car?

It’s extremely quiet.  You seriously need to remember that the car is turned on!

 

On a Green economy in Barbados

Electric cars could be seen as being aligned with the current government’s goal of creating a green economy in Barbados. What is your view on how a green economy operates and do you think that there are sufficient enabling conditions in place to foster its growth?

What has been done in the last year or so with the incentives on alternative energy has been very encouraging.  For decades, solar water heaters led the way, saving an estimated US$100M in foreign exchange in 2002.  We need to take that next step and we hope to also see incentives in place to make electric vehicles cheaper to import and more accessible to all.

 

I have always wondered if people only paid lip service to the concept of becoming more environmentally conscious, and at the time when a purchase has to be made, they will continue to choose their familiar, less environmentally conscious options. A good example would be in the area of organic produce. Informal discussions suggest that people support the idea of organic produce but are not willing to pay the required premium. How do you believe that obstacles such as this can be overcome to increase the demand for green products?

I believe people only see what’s in front of them.  Being environmentally conscious for many is some abstract concept that can be ignored when convenient.  However, if we are able to clearly articulate the immediate economic benefits, I believe we would be more successful in getting people on board.  There is definite and very real economic benefits to driving an electric car and people are quickly realizing it.  The Prius is expected to outsell the Corolla is some markets! That’s a big shift and an encouraging development.

 

Barbados has slipped in the 2014 Doing Business rankings. The main weaknesses are in the areas of registering property, protecting investors, paying taxes and enforcing contracts. Did you face any major stumbling blocks related to policies and procedures when trying to start Electric Car Rentals and are there any areas that you believe must be improved to encourage small businesses to enter the green economy?

We could definitely improve on the turnaround time for licenses.  Every day lost is a loss of possible foreign exchange earnings (and savings) and employment for our citizens.

 

Let’s switch gears now to the more practical elements of managing a young, innovative company in a mature sector.

The car rental market is a mature industry in Barbados. What do you believe would be your main sources of competitive advantage? 

It’s a cool car to drive!  It’s different and persons are beginning to recognize that these cars are now a very viable option.  People can make a statement about who they are and how they are making a difference just by driving a car.

 

Small business owners and entrepreneurs have constantly lamented that getting financing for their business is very difficult in Barbados. They argue that it is difficult to find investors/lenders willing to take on the risk and, when they do, the financial costs are ‘unreasonably’ high. Did you face any challenges raising the finances necessary to launch an unproven product and what advice would you have for other small businesses looking to raise money in the current climate?

I’ve been fortunate in that my business required Asset Financing.  This concept is something that our banking system understands very well.

However, I must note that it is also important to clearly articulate your value proposition and how you intend to pay them back.  This is the area I believe a lot of young entrepreneurs fail.  Not everyone will understand what you are trying to do right away.

 

What are the next steps for Electric Car Rentals?

To see one of every 10 rentals, being an eco–friendly rental.  Small steps…small steps

 

Thank you Kieshelle and we wish Electric Car Rentals every success.

 

Why not drive a rental car today! To find out how to reserve your car from Electric Car Rentals, you can visit their website at https://goelectricrentals.com or call them at 1-246-243-8970.

If you’d like to pick Kieshelle’s brain even further, she can be contacted at  

Surviving the Recession: 5 Steps to Improve Business Decision-Making

I got the idea to write this post when I was writing the Recession and Falling Reserves 2013Q3 review for Barbados. I wondered if all of this doom and gloom about the economy was leading to worse business decision-making. So I did some research and I realised that within many companies marketing spend appears to be down, prices have gone up and projects have been scaled back. The response of corporate Barbados appears to be to cut costs and increase revenue quickly.

This type of reaction is not surprising. The economy is not doing well and companies are in full defensive mode. But does this make sense? Would this type of response actually help the company survive the recession? Would it position the company for extraordinary growth when the economy finally rebounds?

My short answer is no. I am not suggesting that companies go on a spending spree, or that they do not make some hard decisions. What I am suggesting is that they become more focused. So let’s put this in perspective so you can figure out how to not only survive this recession, but emerge a stronger, more competitive and more resilient company.

Improving Business Decision-Making During A Recession

surviving-the-recession

1. Set your strategic goals for at least the next 3-5 years

Before you make any decisions on how your company will respond to the recession, you first need to be very clear on what your strategic goals are for at least the next 3-5 years. Try to be precise. No vague goals like ‘market leader’ or ‘well-respected’. Market leader should be drilled down to something like ‘Top 3 companies in sales of Product X’.

2. Assess the key factors contributing to achieving your goals

Once you are clear on your goals, you can now have a look at your revenue and cost structure with the aim of identifying what truly drives your company’s ability to achieve these goals. Let’s assume that you would like to lead the market in sales in your product category. You first need to understand what drives sales in your market. If it is customer service, then you may not be able to cut staff in this area. If it is product features, then you may have to continue developing that new product, even though it is expensive. If it is location, then you may have to consider pushing ahead with the new storefront.

The keys to accurately identifying these drivers are objectivity and data. By objectivity, I mean being prepared to put aside old assumptions about what it takes to be successful in your market in the search of the truth. The truth is what the data reveals. You may find that your intuitive understanding of your market and the data revelations match. But in the event that they don’t, go with the data. And be prepared to retrain your staff on how to think about their market.

But what if there is no data. First, there is always data. Most companies have accounting records, sales information, staff performance records and general economic information. Second, if the data that you want truly does not exist in your company, create it. You can carry out a survey of your customers, conduct a competitor review or identify what macroeconomic indicators appear to impact your performance.

With the data in hand, you can now test your assumptions mathematically using econometric techniques and/or game theory. Maybe you can do this in-house, but odds are at least part of this research will require the skills of external specialists (see our Market Intelligence and Research and Retainer Services for more information on how Antilles Economics can help you improve your market data).

3. Armed with an understanding of your drivers, you now know what cannot be sacrificed and what can

Armed with your insights on what truly drives your success, you can start considering what changes may be required to support your goals. The first priority is to focus on those areas that cannot be sacrificed: your drivers. This gives you clear guidance on where you must be competitive and what cannot be cut when considering where to trim expenses. For example, at a minimum my company will provide the greatest range of products in category X because customers in my market consider product selection to be the single-most important factor driving their decision to do business with my company.

Any expense or revenue earner outside of your key drivers is fair game once there is no legal reason you have to maintain it. For example, as a banker, you may not be able to lower your deposit interest expense because the Central Bank of Barbados sets a minimum savings rate. On the other hand, you may be able to raise fees, because not only is there no regulation that determines your fees, but it is also not a driver of loan sales.

4. You should focus your efforts on adding additional value to your drivers

The second step is to determine what improvements can be made to add additional value to those drivers. Even in markets with declining demand, there will be customers still seeking your products and services. The aim of this step is to remain top of mind for these customers and capture a larger share of the market. For example, providing an online catalogue of products in Category X or providing an in-store expert on Category X products. These ‘value adders’ should be ranked based on return on investment. This area may also point to an avenue where you can increase revenue. Since customers prioritise this driver, they may be willing to pay extra to receive additional value.

5. Start development on the areas that will support extraordinary growth when the country exits the recession 

Your analysis in Step 2 may reveal upcoming drivers in your market. These are areas that, while not critical to the sale today, are becoming increasingly important. Examples could include more convenient opening hours, ability to purchase online, product samples, emerging attractive segments of the market, certain geographical locations, etc. An analysis of these features should provide you with an indication of what could be in research and development in your organisation during the downturn.

Starting development in these areas may not require incurring significant additional costs. You could restructure the organisation to better align it with your new direction. You could rewrite the copy for your marketing material to focus it on your new target market. You could touch base with a realtor to start looking for the location of your new store. The key to this step is putting things in place to allow you to respond and grow quickly when demand returns.

Surviving a recession requires greater precision in our decision-making than operating during a period of economic growth. But it is not impossible and recessions do not have to signal the demise of your company if you get more focused when making decisions.