before committing your hard earned cash it's worthwhile getting some facts on the industry and the various competitors. Accepted norm for managed contracts in the US is around US$5K per approach either by way of a fixed monthly charge or a % of each ticket. This is the amount at which it is generally accepted a good profit can be realised after the establishment of the 120 to 150 approaches initially required to reach break even.
So you really have to ascertain what monthly income TNC are likely to realise on each new contract and up till now they have been very shy in releasing this 'small' detail. TNC recently won a small contract in Ohio, said to be around $3,250 to $3,500 per approach. This is loss making territory but sure, maybe it is an idea to cut prices to win some initial business. Trouble with that thinking is these contracts in the US are usually long term contracts the RLC company is tied into for 5 years or more. Plus of course cities talk to each other and other prospects would want the same deal. So any company going down this path really is putting a big long term lead weight around its P & L A/C.
Rather than loss leaders it seems these TNC prices quoted by TNC are necessary due to problems they are having getting their few contracts up to speed, word travels fast and they are said to have had a lot of trouble with their technology.
All I'm really saying is do plenty of homework, it's a very promising industry but as always there will be successes and failures, Poltech went down in flames because of faulty technology and price cutting, they won't be the last.
TNC Price at posting:
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