26 / 120
26
PROFESSIONALIZATION
ABLA’s training, which will continue to be free, will gain new
momentum in
2015.Itinvolves the expansion of what has already
been a success, as in 2014 hundreds of professionals who
took part in ABLA training courses set a new record in terms of
positive feedback, with over 90% of the 12 courses being rated
as “excellent” and “good.”
According to economist Jorge Miguel dos Santos, a
teacher on ABLA courses, these results show that the pursuit of
profitability really is one of the main obsessions for every rental
and leasing company. “We started a new venture in 2015 to train
members to achieve a return that can guarantee the growth of
the company and the sector as a whole,” he says.
The market is changing rapidly and competitiveness even
more so. “This has forced ABLA to develop a new methodology to
really help companies compete in some of the toughest markets,”
adds Santos. “And so the course and the support of software
have been upgraded to better meet the new needs rental and
lease companies have,” he says.
Today, the level of sophistication is what the companies were
looking for. For example, the software calculates the result of a
monthly lease (fleet outsourcing) or daily rental not only through
cash flow, but also using financial and economic indicators such
as the Margin of Contribution (MC), Net Present Value (NPV) and
the Internal Rate of Return (IRR).
In addition, new approaches have been incorporated into
each training stage in a very natural evolution for a dynamic
sector like vehicle rental and leasing. “What gets an increasing
number of members involved is the fact that standing still means
losing out,” says Santos.
According Santos, one common mistake is to want to
increase the size of the fleet at any cost, imagining that costs will
be reduced.” It is a half-truth, which works to some extent,” he
explains. “Over time, it can lead to losses that will increase the
rental company’s debt level and make it unfeasible,” he warns.
Santos says it is critical to understand what in fact fixed
costs, variable costs, administrative expenses, taxes and fees
are. “For example: fixed costs are independent of the vehicle’s
use, meaning that if it is rented out or not, these costs must be
paid,” he stresses. “Variable costs occur only when the vehicle is
rented or leased, such as tire wear and maintenance,” he says.
Regarding administrative expenses, Santos says they are
not linked to the quantity produced and are paid to manage the
business.” It is administrative expenses that differentiate each of
the companies,” he says.
Taxes and fees, which focus on revenue, should also make
up the final price. Santos warns that the incorrect incorporation
of taxes can lead to losses.
Another question many administrators have is with regard
to filing use of the property as a cost. “It’s not a cost, but comes
in as an expense as it is not linked to the quantity produced,”
explains Santos. “The main fact is that if this property is not being
used by the company, it will certainly be generating resources,
either through rent or being sold,” he says. “Being owned could
be a competitive advantage in a given period,” he says.
Another uncertainty among businesspeople regarding the
balance sheet is about what “outlay” is, what “cost” is, and
what “investment” is. Santos explained each item in the course.
“There is a lot of confusion among technicians and some the
businesspeople,” he says.
To make it clear, he adds: “outlay is the effective output of
cash resources and may occur before, during or after costs. It is
common to believe that because it has been paid, the cost or
expense ceases to exist and therefore the rental price may be
lower,” he says.
He goes on, “Cost is the spending linked directly to the quantity
produced and, in some cases, there is no outlay, but the cost exists.
A typical example is the cost of loss insurance, which is often not
paid, but still should be considered as a cost item,” he says.
He defines investment as any capital contribution made in
the company, whether by partners or third parties. “Regardless
of the owner of this capital, they must be paid. If it is one the
partners, it is profit; if a third party, it is interest.”
The economist also clarifies what is the financial age of a
vehicle. In fact, he prefers to call it economic life. “It is the period
in months in which the vehicle is available for rent or lease,
or whine is generating revenue. In the rental and lease sector
various economic lives are adopted, according to the strategy of
the company, which can vary from 6 to 24 months,” he says.
Knowledge is key
Course teaches managers to calculate costs, to arrive at the profit margin
About ABLA’s training course
According to Jorge Miguel dos Santos, calculation methodology is one of the innovations in the current ABLA training course compared
to the previous version. “The method used is Total Cost. Briefly, it is the sum of costs and expenses added to the mark-up, a margin that
includes taxes and profit.”
The current program uses Direct Cost, in which are included only the costs incurred directly at each location. “In this method, the
businessperson’s role is to identify whether there is enough margin to pay the costs and generate a profit. This is a more appropriate
method for a competitive market, as the vehicle rental and leasing market in Brazil has become,” says Santos.
The course lasts eight hours and aims to raise awareness that what matters is making a profit and not the number of vehicles. Santos
emphasizes the importance of participation. “Besides being of specific training for rental and leasing of cars, we teach how to analyze
results and analyze them,” he concludes. “This is fundamental to the sector’s health.”