If the buses aren’t present and the line doesn’t move, people lose faith. A docile crowd can turn unruly, ruining his reputation in an afternoon.
“You have to know how to handle 5,000 people an hour,” said the 52-year-old businessman, who has been riding the bus business since he was a kid, helping his father’s tour service whisk customers to weekend trips in New York and New England.
“People don’t mind [waiting] if the line is moving slowly, but it has to be moving,” he said.
Buses must be visible. Signage must be present. There needs to be communication.
“When there’s no buses and there’s lots of people, that’s when the [stuff] hits the fan.”
Take the Albuquerque Balloon Festival. It was a combustible mix: 4 a.m., 10,000 early arriving patrons milling about in parking lots. Buses not ready. Ticket lines. A killer deadline to see a dawn launch of hot air balloons.
Sherman sucked it up and took a bath on profits.
“I loaded them all without tickets and sent them on their way,” Sherman said.
Sherman’s little-known Horizon Coach Lines is one of the largest privately owned of its kind in North America. His vehicles are strategically located in 15 markets across North America, from Vancouver to West Palm Beach. They are located near wherever big events happen.
His business, headquartered in an office building he partly owns in Sandy Spring, is a daily battle against weather, traffic, crowds and the clock to ensure hordes of people move safely and swiftly between hotels, conventions, sports venues, restaurants and who-knows-what.
The 2,000-employee enterprise includes his high-margin consulting company with the scintillating name of Transportation Management Services.
He also owns Horizon, which runs his fleet of coaches, shuttles and mini-buses.
When Horizon Coach Lines isn’t supplying vehicles for TMS’s special events, it’s operating commuter shuttles for private companies such as eBay.
Sherman studied business at Frostburg State University in western Maryland, then went to work for his father. He struck out on his own in the early 1990s, buying a 40-coach bus charter service in Washington, whose business centered on projects like ferrying student groups around the city.
The bus company, which was struggling, loaned him $4 million to come in and rescue it. Sherman said he allowed the business to expand too quickly, outrunning its cash reserves and not collecting its bills quickly enough. The company went bankrupt.
“I didn’t have enough extra cash to keep the buses running while customers took their 60 days to pay the bills,” he said.
The failure taught him to have a laser-like focus on the numbers. He also learned that being bigger was not always better, which many businesses fail to learn right off the bat.
“It’s not about the top line on the income statement,” he said. “It’s about the bottom line, where the profit is.”
Sherman and a partner launched TMS in 1995 with $50,000 in savings. The business model did not include buses at first. Instead, TMS would provide the expertise and map out the logistics for big conventions and mega-events. The buses would be leased from someone else.
“We kept it asset-light,” he said.
Through cold-calling and legwork, they landed one of the biggest jobs in transportation logistics, the sprawling Computer Dealers’ Exhibition, known as Comdex, in Las Vegas in 1995.
“The show management company said that either the win would make us a success in the industry, or it would be the last show we would ever do,” Sherman recalls.
Sherman made more than $100,000 on the project, establishing his credentials.
The company started picking up Major League Baseball All-Star games, Republican conventions, the 2002 Winter Olympics in Salt Lake City and other large associations’ events. It even expanded overseas, running World Cup soccer in South Africa and Formula One racing in Abu Dhabi.
The biggest challenge was the dedication of the National World War II Memorial in May 2004, which was a four-day celebration.
The logistics were a huge challenge because of the steamy weather and the difficulty in moving veterans, most of whom were more than 80 years old, and some of whom were in wheelchairs, around the city.
During the past few years, Sherman began assembling his own bus fleet, convinced that with proper financing, state-of-the-art technology and well-trained and motivated drivers, he could turn a profit. He has, so far, despite the debt payments from the 1,050 motorcoaches and mini-buses and shuttles he bought last fall for $18 million.
“We are changing the culture of Horizon from the ground up,” he said.
The high costs of buying, running and fixing a bus fleet are considerable. The buses alone can cost $600,000. And he buys on average about 20 a year.
The real profits are on the consulting side. He might charge the National Basketball Association $500,000 for the buses that move VIPs around an all-star game for five days. But on top of that, he gets 10 percent, or $50,000, for figuring out the logistics.
All told, he expects to clear a 15 percent profit, before the debt payments, on $180 million in revenue this year.
He expresses faith in that outcome. The same faith his clients have in his buses.
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