FINANCIAL PLANNING

Today I remembered a quote of Benjamin Franklin, which has much meaning in few words: "Failing to plan is planning to fail". This has been a principle for me, which has proven its validity in different situations in my life and in business, and how it is important at the financial management. So I will share with you how to create a good "Chart of Accounts" for car rentals to help you on financial management.

When we set a goal and outline a plan to reach them, everything becomes easier, reduces anxiety of almost all people involved. It is possible because having a plan, everyone will share the same destiny, how to get there, tasks, resources required, milestones along the way, and time required to reach each of them until the target.

Also, a good planning should address: processes, trainings, risks and costs. Processes will outline "what", "who", "how", "where", "when" to do, the methods to apply, resources that will be consumed, the process' input and output. Trainings will empower the Human Resources on the processes, methods, technologies and skills. Risks are like stones in the path, so we must find out what are the potential risks, then design some managerial processes to mitigate them and guarantee that all tasks will be performed as designed, scheduled and budgeted. Costs are normally consequence of resources involved and consumed by the operational and managerial processes, and the time expended on each of them. However, whatever planning is perfect and accurate, unforeseen and / or improvement opportunities will surely arise, then the plan must be revised.

All above are some of the reasons to use the PDCA cycle, a method widely used for planning, control and improvement of processes in a company. It was created by W. A. Shewhart in the 20s and is known also as "Deming Cycle" due to the disclosure by professor William E. Deming, who in the 50s was considered, together with Juran, the pioneers of the quality movement, and responsible for the Japanese industrial miracle. PDCA stands for “Plan”, “Do”, “Check” and “Act”:

• Plan: is the first stage of the PDCA and starts with a plan, based on the guidelines and rules of the company, starting with setting the goals, the path to reach them, and the definition of the method to be used. A well-designed plan avoids failures and losses in subsequent stages of the cycle.
• Do: is the implementation of the plan, which consists in training the actors/employees involved in the method to be applied. It should also define and collect the data for later analysis.
• Check: includes the analysis and verification of results and data collected, but may also occur during the implementation (Do), to verify if the work is being carried out as planned. During this stage can also be detected errors or failures, which should be analyzed in the next stage.
• Act: this is the last phase of the PDCA cycle, where corrective actions are performed to locate and investigate the causes of failures, or deviations in the processes, found in the previous stage, and working to eliminate them. So the cycle returns to the first stage again.

If we want a financial management effective and reliable, the PDCA cycle is recommendable, and must start with the "Chart of Accounts", which must cover the same level of details that we want to manage and control in our car rental business, and a way to accomplish this is to begin defining the accounting's classes, as below:

• 1 - Asset
• 2 - Liability
• 3 - Owner's Equity
• 4 - Revenue 
• 5 - Expense 
• 6 - (Gain)
• 7 - (Loss)

Subdividing the classes above into sub-classes, e.g.:

• 1 - Asset
• 10 - Cash
• 11 - Receivable in long term 
• 12 - Inter-office receivable
• 13 - Permanent
• 2 - Liability
• 20 - Cash
• 21 - Due to long term
• 22 - Due on revenue
• 23 - Cleaning account
• 3 - Owner's Equity
• 30 - Owner's equity
• 4 - Revenue
• 40 - Miscellaneous or other revenue
• 41 - By time
• 42 - By Km/Mile
• 43 - Insurance
• 44 - Coverage
• 45 - Fixed assets
• 46 - Courtesy or discount
• 47 - Additional charge
• 48 - Promotion
• 49 - Optional item and service
• 5 - Expense
• 50 - Miscellaneous or other expense
• 51 - Reimbursement
• 52 - Loss by charge less
• 53 - Discount on credit card
• 54 - Commission
• 55 - Repair
• 56 - Preventive maintenance
• 59 - Uncollectible
• 6 - (Gain)
• 60 - Miscellaneous and other gain
• 61 - Vehicle rental
• 61 - Lease
• 62 - Vehicle sales
• 63 - Vehicle rental of third parties
• 64 - Gain on rental cars by third parties
• 69 - Gain with financial investment
• 7 - (Loss)
• 70 - Miscellaneous and other loss
• 71 - Vehicle rental
• 72 - Lease
• 73 - Vehicle sales
• 74 - Vehicle rental of third parties
• 75 - Loss on rental car by third parties
• 79 - Loss with financial investment

After we have the classes and sub-classes defined, it is time to work on the accounts, those that we will manage and control in our car rental business. However, here, we will only work on the classes and sub-classes outlined below:

• 1 - Asset
• 10 - Cash
• 1010 - Cash
• 1011 - Petty Cash
• (... 1019)
• 1120 - Bank
• 1121 - Bank name #1
• 1122 - Bank name #2
• (... 1149)
• 1050 - Credit card
• 1051 - Visa
• 1052 - Mastercard
• 1053 - American Express
• 1054 - Dinners 
• 1055 - Discovery
• (... 1068)
• 1069 - Own credit card
• 1070 - Account Receivable
• 1071 - Billed to the customer's credit
• 1072 - Postdated check
• 1073 - Bank order
•  (... 1099)
• 11 - Receivable in long term
• 1100 - Receivable in long term
• (... 1199)
• 12 - Inter-office receivable
• 1200 - Inter-office receivable
• (... 1299)
• 2 - Liability
• 20 - Cash
• 2000 - Cash
• (... 2009)
• 2010 - Loan
• (... 2099)
• 21 - Due to long term
• 2100 - Account Payable
• (... 2199)
• 22 - Due on revenue
• 2200 - Miscellaneous and other taxes
• 2201 - VAT
• 2202 - GST
• (... 2219)
• 2220 - Vehicle licensing
• (... 2229)
• 2230 - Other charges
• 23 - Clearing account
• 2300 - Clearing account
• (... 2309)
• 2310 - Customer deposit
• (... 2399)
• 4 - Revenue
• 40 - Miscellaneous or other revenue
• 4000 - Miscellaneous or other revenue
• (... 4099)
• 41 - By time
• 4100 - Revenue by time
• (... 4199)
• 42 - By Km/Mile
• 4200 - Revenue by km/mile
• (... 4299)
• 43 - Insurance
• 4300 - Other rental insurance
• 4301 - LDW (Loss Damage Waiver)
• 4302 - CDW (Collision Damage Waiver)
• (... 4399)
• 44 - Coverage
• 4400 - Other rental coverage
• 4401 - SLI/LIS (Liability Insurance Supplement)
• 4402 - PAI (Personal Accident Insurance)
• 4403 - PEC (Personal Effect Coverage)
• (... 4499)
• 45 - Fixed assets
• 4500 - Other rental fixed asset
• 4501 - GPS
• 4502 - Baby seat - up to 3 years old
• 4503 - Baby seat -  greater than 3 years old
• 4504 - Cellular phone
• 4505 - Smartphone
• 4506 - Umbrella
• 4507 - Trailer
• (... 4599)
• 46 - Courtesy or discount
• 4600 - Courtesy
• 4601 - Discount
• (... 4699)
• 47 - Additional charge
• 4700 - Additional charge
• 4701 - Airport tax
• 4702 - Additional driver
• 4703 - Refueling
• 4704 - DROP OFF
• 4705 - Underage
• 4706 - Surcharge
• (... 4749)
• 4750 - Damage
• 4751 - Repair
• (... 4799)
• 48 - Promotion
• 4800 - Promotion
• 4801 - Parking
• 4802 - Movie ticket
• 4803 - Theater ticket
• 4804 - Park ticket
• 4805 - Restaurant discount
• (... 4899)
• 49 - Optional item and service
• 4900 - Optional item and service
• 4901 - Delivery vehicle
• 4902 - Collect vehicle
• 4903 - Daily of chauffeur
• 4904 - Daily of chauffeur bilingual
• 4905 - Hourly of chauffeur
• 4906 - Hourly of chauffeur bilingual
• 4907 - Daily tour guide
• 4908 - Daily tour guide bilingual
• 4909 - Hourly tour guide
• 4910 - Hourly tour guide bilingual
• 4911 - FPO (Fuel Tank of Fuel)
• 4912 - Toll-free
• (... 4999)
• 5 - Expense
• 50 - Miscellaneous or other expense
• 5000 - Miscellaneous or other expense
• (... 5099)
• 51 - Material and inputs
• 5100 - Reimbursement for material or inputs
• (... 5109)
• 5110 - Material consumed
• 5111 - Motor oil
• 5112 - Brake fluid
• 5113 - Filter
• (... 5129)
• 5130 - Reimbursement for service
• 5131 - Mechanical service
• 5132 - Tire repair
• 5133 - Towing
• 5134 - Bodywork
• (... 5149)
• 5150 - Transportation 
• 5151 - Municipal bus
• 5152 - Intercity bus
• 5153 - Taxi
• 5154 - Flight
• 5155 - Car rental
• (... 5199)
• 52 - Miscellaneous expense
• 5200 - Miscellaneous expense
• (... 5299)
• 53 - Loss by charging less
• 5300 - Loss by charging less
• (... 5399)
• 54 - Discount on credit card
• 5400 - Discount on credit card
• (... 5499)
• 55 - Repair
• 5500 - Commission
• 5501 - Commission to Travel Agency
• 5502 - Commission to Hotel
• 5503 - Commission to Representative
• 5504 - Commission to Employee
• (... 5599)
• 56 - Repair
• 5600 - Miscellaneous repair
• 5601 - Engine repair
• (... 5659)
• 5660 - Bodywork repair
• (... 5669)
• 5670 - Internal repair
• (... 5679)
• 5680 - Electrical repair
• (... 5699)
• 57 - Preventive maintenance
• 5700 - Miscellaneous maintenance
• 5701 - Engine oil and filter substitution
• 5702 - Brakes pads, fluids refueling and V-belts
• 5707 - Injection and ignition system
• 5708 - Sails and cable
• 5709 - Monthly revision
• 5710 - Annual revision
• 58 - Uncollectible
• (... 5899)

After completed the "Chart of Accounts", we can implement it (PDCA). Also, we could elaborate the company's budget, assigning estimated values ​​to each account, e.g. for the period of one year. It is also a good time to review the processes - operational and managerial - of each sub-class, working to improve them through the use of better methods, empower employees, implement best-practices, etc. Then define the key performance indicators (KPIs) to be monitored (PDCA), so occurring a deviation, or whether something go out the track, take a corrective action would be necessary (PDCA).

Over time and with the dynamics of the business, it will be natural if there is a demand for new accounts, then it is time to review the "Chart of Accounts", restarting the PDCA cycle.

CAR HIRE, FOCUS ON TECHNOLOGIES OR CORE-BUSINESS?

Once, talking with a CEO of a car hire, I wanted to know what their Information Technology (IT) department was performing for the business.

Proudly, he began to tell me about their IT's modern technologies, qualified professionals, the sub-contracted companies and infrastructure built to support their entire operations.

Believe me, even for a company that has the IT as their core-business, everything was amazingly high quality and very high numbers.

I wondered if all their capital invested would be paid back. If so, what would be their "Return On Investment" (ROI)? Well, I still do not know, but believing that they would have better alternatives for so.

That company would be looking at "Total Cost Of Ownership" (TCO) of their IT assets and projects? Maybe, but the CEO was too proud to answer this kind of question.

Not to say that a company should not have their own IT department, but I always believed that an IT department really adds value to their company, when instead of promoting the technologies employed, they're keeping focus on business requirements, are problems solvers, and accomplishments are speaking by themselves.

I have the conviction to say that the CEO would have given me other answers, if their IT department would be actually delivering the best options for their business.

Well, instead of have annual budget and "overhead" increasing, they could reduce them, focusing on their core-business, and transferring to a third company all those things that they are not specialist, so others could be doing better than them (supplier's core-business), e.g.: telecommunication, network, hardware maintenance, car rental system ("Software as a Service" is one of the best options), servers, data-center / cloud-computing, trainings, vehicles maintenances, etc.

SELL A DREAM

Undoubtedly, my post today is quite different from all previous ones. Do not worry, it's only a play on words, summarizing the thinking of some customers.

Sometimes I go,

Without knowing where to go,

Step in narrow and wide paths,

But I never forsake my path.

Stop! Think! Following the path.

Climbing, descending, looking around,

My destination is close, or outside the path.

Is there a car hire around?

What I meant to say? 

1. Work hard to capture your customers' attention.
2. If you want something different, do something different.
3. Sell dreams, instead of commodities.
4. Continuously innovate with agility (soon or later, your competitors will copy advantages of your products).
5. Listen your customers, they are always right.
6. Do not reinvent the wheels, do benchmarks, following best-practices.

It's a brief summary. Good luck!

DIAGNOSIS AND STRATEGIC PLANNING FOR CAR RENTALS

Diagnosis the performance of previous year (i.e. 2011) should be a priority for all car rentals, looking for operational and economic indicators, using them as basis to define goals set for next year (i.e. 2012). Also, the indicators should be feasible to the PDCA cycle (Plan-Do-Check-Act). 

Subjectively goals-settings, without metrics, are useless to apply the PDCA cycle, so avoid to do something like this: a) increase fleet utilization, b) increase the volume of rental agreements, c) increase profitability, etc. Instead, look for indicators to make those goals specific and measurable: a) increase Average Fleet Utilization in 10%, b) increase Annual Volume of Rental Agreements in 30%, c) increase Annual Profitability in 20%, etc.

Let’s see an example! Analysing 2011's performance, we found: 

• 40% of “Average Fleet Utilization“ (AFU), 
• 3.45 days of “Average Length of Rental” (ALR), 
• $172 of “Average Rental Revenue” (ARR), 
• 200 “Numbers of Vehicles in Fleet” (NVF).

Working with a management team, we set aggressive, but achievable goals, combining data above with statistical data collected from the competition and market. This gives us specific goals for 2012: 

• (1) increase “Average Fleet Utilization” (AFU) by 20% (from 40% to 60%), 
• (2) Maintain 3.45 days of “Average Length of Rental (ALR), 
• (3) increasing “Average Rental Revenue (ARR) from $172 (49.86/day) to $240 ($69.57/day)

Now, with these goals set, and the combination of the indicators (formulas below), we will deploy the strategic goals into operational goals (unfolding), for which would recommend to consider additional metrics. However, in this article, to make easier to understand, it still worth demonstrating the effect of this example upon “Annual Gross Revenue".

• Formulas:
• Volume of Rental Agreements (VRA) = (NVF x 365 x AFU) / ALR
• (A) VRA = (200 x 365 x 0.4) / 3.45 = 8,463
• (B) VRA = (200 x 365 x 0.6) / 3.45 = 12,695
• Annual Gross Revenue (AGR) = VRA x ARR
• (A) AGR = 8463 x 172.00 = 1,455,636.00
• (B) AGR = 12695 x 240.00 = 3,046,800.00

• Calculated values:

Consequently, this calculation demonstrates that an increase of 20% to AFU (very achievable from a low 40% base) PLUS a 71% to ARR have a potential to increase revenue by 109%. However, this is the tip of the Iceberg, so you should check for Marginal Cost, monitoring also other metrics and indicators. 

OPERATIONS OF FLEET MANAGEMENT

In the highly competitive business environment, quality and timeliness of business information, for an organization, it is not a choice between profit or loss, but can be a matter of survival or bankruptcy.

Therefore, tools for visualization of information, assisting in decision-making becomes increasingly essential for business owners, directors and managers. However, it is necessary that the leaders become aware of this information, being aware of how to use them in managing their operations.

If management is based on stable processes and their metrics, then the information will work as indicators of efficiency or inefficiency of the operations, facilitating the decision-making.

In a car rental company, there are several operations, which must work in synchronization with each other, so a system for business management, specializing in rental cars, must integrate and automate all complex operations, taking care of a all information required for a good management, facilitating decisions which should be taken almost instantly when operations is running.

Almost all people in car rental agree that "Fleet Management" is usually complex, because it involves many operations which must be managed with efficiency: purchase; car wash; availability control; distribution between locations; control of parking lot; pricing; maintenances - preventive and repairs; overbooking; blackout; due vehicles; miles/kilometers lost; depreciation; deactivation based on odometer or future date; revenue analysis per vehicle; maximization of incomes based on a mix of vehicles; vehicle performance; location of each vehicle; vehicle history records; vehicle's characteristics; fuel charges; rotation of wheels; tire tread depth; status of each vehicle; damages; vehicles being used by employees; then sales. Much information to manage, right?

Well, fleet management will be easier if your system is smart enough, warning you about "what to do", and "when do it". Recalling that a fleet management in a car rental depends on many other operations interconnected, either predictable or unexpected, as: bookings; vehicles exchanges; renters approaching the counter to rent a car; insurance replacements; fleet renewal; etc. Actually, a smart system should provide all what were outlined above (healing your headache), saving your time on decision-making, being effective.

BUSINESS SUCCESS

Uncommon success comes with uncommon approaches to business. Your product or service must be genuinely unique. Gives attention to service and product, delivering a high quality.

Have a strong belief, from the very top, that taking care of customers and employees must be the number one. Empower workers as entrepreneurs and pay them on the bottom line, will make them to act like owners, taking care to avoid the risks, but working hard for the same rewards as entrepreneurs, reaching a superior service.

Agility is fundamental to delivery soon the right product or service, that customers are looking for. However, if you are NOT being faster than your competitors, then something must be changed quickly.

Do not assume what your customers want, but do a survey to find out what they really want as soon as possible.

Do you want some benchmark? Well, learn about the world best companies, not only those in your industry, but also from other markets.

DEPRECIATION OF ASSETS

Many business owners and managers are aware that is very important to correctly price their products and services, CRM, process-based operations, standardization, PDCA, quality assurance etc., but are negligent when the subject is the depreciation of assets, noting too late, that the renewal of its fleet will be costly.

Certainly, other factors can, or should, be considered for fleet renewal, but one of the most important, in determining the right time to do it, is the calculation of the depreciation, rarely considered in strategic planning.

In fact, in another article of this blog, I described how to calculate a selling price, and avoid wasting your money. The depreciation value represents cost, and should be considered. But what is the depreciation?

Depreciation is the loss of values ​​of the assets. This devaluation occurs because the wear on these assets, or loss of utility due by their use, action of nature, or obsolescence, which occur over the years. If these assets are the main sources of revenue, as are the vehicles for a car rental company, then the depreciation should be computed and treated carefully by entrepreneurs and managers.

There are several methods to calculate the amount of depreciation, such as: 

• Linear
• By use 
• Accelerated

The linear method is the most widely used, especially in accounting. However, the "Accelerated Method"  and "By Use" are recommended when there are factors or characteristics that will accelerate the process of devaluation, being more common in productive processes, but they should be seriously considered by all car rental companies for their strategic decisions.

Let's calculate the depreciation of a vehicle, using the Linear method. We must determine the  Depreciation Rate, a constant, on the Capital Cost, which is computed considering the lifetime of the asset.

• Depreciation Rate (%):
• Period of wear / obsolescence: 5 years, which corresponds to 60 months (5 x 12)
• Rate of wear / obsolescence total: 100%
• Rate = 100% / 60 months = 1.6667%
• Monthly Depreciation:
• Capital cost of the vehicle: $30,000
• Value = $ 30,000 x 1.6667% = $501.01    

The monthly amount of depreciation calculated above, $500.01, must be added to other vehicle costs, so you can calculate the sales price/rent per day or hour. Example: 

1. Cost per day: $ 500.01 / 30 days = $16.67/day
2. Cost per productive hour: $ 500.01 / 30 days / 8 hours = $2.08/hour

Theoretically such a vehicle should be replaced within a maximum of 60 months. Otherwise, if we consider that in a rental car operation, customers lose interest in older cars, we could determine, using statistical analysis, the accelerating rate of devaluation, which may be used in one of the above methods. Example:

• Depreciation Rate (%):
• Period of wear / obsolescence: 5 years, which corresponds to 60 months (5 x 12)
• Rate of wear / obsolescence total: 100%
• Index of accelerated wear: 2.5 (life will be reduced to 24 months) 
• Rate: 100% / 60 months = 1.6667%
• Accelerated rate:  1.6667 x 2.5 = 4.1668%                          
• Monthly Depreciation:
• Capital cost of the vehicle: $30,000
• Value = $ 30,000 x 4.1668% = $1,250.04

Therefore, the value of the monthly depreciation accelerated, $1,250.04, should be added to vehicle costs, so: 

1. Cost per day: $ 1,250.04 / 30 days = $41.67/day
2. Cost per productive hour: $ 1,250.04 / 30 days / 8 hours = $5.21/hour

Do you want to look more closely at the depreciation calculation for your vehicles? If so, CARS+, the leading management system for car rentals for global brands and independents, will help you!

INFORMATION TECHNOLOGY FOR BUSINESSMAN

.

If you're not a computer expert, but a businessman, maybe you felt like an illiterate at some moment, hearing many jargons, acronyms and titles used in computing. Well, it should not happen in this way.

I'll try to share with you what I have been learning in more than 25 years working as an specialist in the Information Technology (IT), because it is time for you know how to choose and discuss IT solutions for your business, rather than delegate by omission, or stay 100% depending on ​​IT people. An IT decision can boost or destroy your company. 

Even being an IT specialist, my knowledge, experience and interests include business, engineerings, administration, entrepreneurship, quality assurance, best practices, operations and processes. Although I had began early with the electronics, computer science, and math, I never limited myself to these knowledges, always looking for practical applications of these sciences in the companies I've been working, as: electrical engineering, construction, financial, industrial, car rentals, IT and software. 

I've learned with clients and leadership of teams, how important is to emphasize on the IT applications, rather than treat it as a core activity, making the complexities of IT imperceptible to customers.

Currently, I feel comfortable and prepared to discuss any matter of the business environment, whether in the strategic or operational level, be about the administrative, financial, Human Resource (HR), accounting, costing, production, logistics, fleet, CRM, TQC, etc. Also, the interest in people, their cultures and contexts, makes customers more engaged and interested in contributing and working together, making it easier to eliminate their problems, find solutions and/or make improvements.

As in the fashion industry, there is the "fashion technology", which are not always what's the best in IT, but will make many professionals go in their search and advocacy. They will try to deploy these technologies in your company, because those will keep them updated to the labor market. Therefore, entrepreneurs, directors and managers should be alert to this. So what do about it? 

Being the IT so strategic to your business, such as Marketing, HR, Logistics, Financial, Costing, Production, Manufacturing, etc., then you should devote all attention to the IT as you do for the others. Remember that an IT decision can leverage or destroy your company. 

Here are some tips:

1. Require simplicity, eliminating the use of jargons, acronyms and/or titles specific of the IT area, substituting them by synonyms or analogies of common sense, or normally used in your industry.
2. Develop your knowledge in the IT, as you have done for other strategic areas. There are good magazines that can help you with this.
3. Prioritize the requirements of your business, Total Cost of Ownership (TCO) and Return On Investment (ROI), instead of the characteristics of IT solutions, avoiding decisions based on technological requirements.
4. Consider the measurable benefits, including TCO and ROI, quality, productivity, and impacts on customer satisfaction.
5. Avoid reinventing the wheel, try to benchmark and adopt best international practices, therefore it will cost cheaper and will yield better results.
6. Focus on core business of your company, then consider outsourcing of what are common sense, or another company can do better for you.

No resources in Information Technology is so complex that it can not be explained simply and practice using the language of your business.

THE IMPORTANCE OF STANDARDIZATION

In consulting to various clients I've been watching some shortcomings, which are not related to software or hardware, but the lack of and standardization: Processes, Service Instructions, and Trainings.

The consequences of this are usually the loss of efficiency, higher operating costs, and the difficulty in developing a corporate image more homogeneous, which could be observed by their customers as a factor that differentiates the company from their competitors.

I do not want to lecture here on how to define and document a Process, Service Instruction, or Training, but to draw attention to the importance of each one, because there are rules and procedures detailing them, as are the Quality Assurance principles, outlined by the ISO 9000 family of standards (which the ISO 10000 series is an integral part) emphasize the importance of managing human resources and the need for adequate training, so look carefully at the ISO 9001:2008 and ISO 10015, to name some of them.

It is recommended that all people of all levels of the organization are trained to meet the organization's commitment to provide products according to the quality required by a changing market, where requirements and customer expectations are increasing continuously. However it will be effective only if your company already has their Processes, Service Instructions, and Trainings, standardized, documented and easily accessible to everyone. This, therefore, will be the beginning of a process of continuous improvement towards Total Quality, exceeding expectations of your customers.

VISION STATEMENT

In the previous article about Leadership, was mentioned that a Leader must have a Vision, which must be shared with the team. In this article let's talk about the Vision Statement, which will help you apply in your organisation, in case you don't have one yet.

Where your organisation is headed? The answer for this question will be the Vision Statement, however let's talk how to define it.

What are the characteristics of a Vision Statement?

1.  Future casting
• Using a gerund verb to define your future casting.
2. Clear and Visible
• Metaphoric speaking, if you can actually see yourself in top of that mountain, your team will see either.
3. Audacious
• Thinks big, being audacious, thinking in what you want to accomplish for your organisation.
4. Descriptive
• Use a single sentence, which is the vision description.
5. Time bound of 5 years (3 up to 10 also works, however I recommend 5 years)

Looking at a diagram representing where your organisation is right now, point 'A', and where you wanna be in 5 years, point 'B'. If you think on how you're going to get there in point 'B' and the gap in between 'A' and 'B', then it drives you to the Mission statement, which answer "why your organisation exist"; but 'B' is your Vision statement, "where your organisation is headed".Why it is important? Will be a big problem if your Vision is out of the context of your Mission.

The purpose of the vision statement is to inspire, energize, motivate, and stimulate your creativity, not to serve as a measuring stick for success; that is the job of your objectives and goals, so following the rules, let's create Vision Statement for a car rental company, named "Super Rental":

1. Future casting
• We will be creating loyalty customers.
2. Clear and Visible
• We serve customers anywhere and quickly.
3. Audacious
• Our clients consider us the best company to rent, and our employees the best company to work.
4. Descriptive
• Be the most innovative car rental company in the world, delivering safe vehicles anywhere and quickly, for customer enjoyment, rewarding their loyalty, as well as the employees' accomplishments.
5. Time bound of 5 years
• 2011: In 5 years be the most innovative car rental company in the world, delivering safe vehicles anywhere and quickly for customer enjoyment, rewarding their loyalty, as well as the employees' accomplishments.

So, the Vision Statement for Super Rental company will be:

Vision

"2011: In 5 years be the most innovative car rental company in the world, delivering safe vehicles anywhere and quickly for customer enjoyment, rewarding their loyalty as well as the employees' accomplishments".

LEADERSHIP

Leadership must be shared because it is impossible for the leader to take care of everything and everyone, so he needs to delegate, allowing his followers to analyze the details, make choices, take decisions and actions.

As customer contact is essential to the business of a company, which will determine whether the customer will purchase and will become a loyal customer, the leader in his side, who is often away from these direct contacts, must be a server and coach of his followers, for they be able to perform this role very well. So, yes, this attitude will inspire and share the leadership with their followers.

Also, the leader must be visible and have ethical attitudes, as a leader does what he says, becoming an example to be followed, and this visibility is expected, and without this there will be no leadership.

Another important factor is to share a clear vision to reach the target with his followers, once is easier to achieve what we can see or predict. So, remain focused on his vision, correct the direction, think broadly and openly, overcome obstacles, lead and motivate, coaching periodically his followers are some of the leader's roles.

You have heard that no one leads a group of people to remain in place, unchallenged, unmotivated? Leadership involves a sense of change, where all are engaged to perform, for the action that leads to the realization of this change: a greater market share, consolidation of market leadership, a change in corporate structure, etc. 

Here six rules to help you improve your leadership:

• LEADER is the bearer of legitimate authority, the one in whom followers acknowledge their claim to be heard, respected and followed.
• LEAD is to connect your employees to your business.
• LEAD is getting and keeping employees who work and act like owners.
• LEADERSHIP is the art of getting desired results, agreed and expected by employees engaged.
• LEADERSHIP is the art of making others feel like doing something you are convinced that should be done.
• LEADERSHIP is the art of mobilizing others to struggle for shared aspirations.

"The only definition of a leader is someone who has followers. Some people are thinkers. Other prophets. The two roles are very important and necessary. But without followers, there can be no leaders" (Peter Drucker)

Also, know how to avoid common mistakes of a leader is crucial:

• Inability to interpersonal relationships
• A leader is primarily a manager of people, before being a manager of processes and operations. A leader who does not listen to his followers, does not communicate and think he is never wrong, certainly affect his relationship with his team, superiors and peers, also missing the opportunity to learn and innovate. So a leader with these characteristics will have difficulties in building a high performance team.
• Not open to new ideas, or different ones
• A big mistake is when a leader does not accept the ideas of others, since the idea does not belong to him. This suggests there is uncertainty, because the leader does not know everything.
• Not focused on results, nor take reponsibility
• The leader who is not focused on accomplishments will remain in a danger position, because it will reflect negatively on the goals, and worse, if the leader does not assume responsibilities that are inherent to his activity, the chaos is installed.
• Failure to take the initiative
• If the leader does not take any initiative, then someone will take it. In an increasingly competitive world, an initiative was not taken in time, will mean loss of market share to competitors.
• Inability to practice self-development and learning from their mistakes
• A leader who can not learn from their mistakes, will also have difficulties in having a high performance team as the team is a "mirror" of the leader, offering resistance to change and improvement.

So do not let your company go without a leadership, drive it as recommended in this article, working with your team, getting better results going forward.

Books recommendations:

Strategic Planning For Success: Aligning People, Performance, and Payoffs

Leadership: Theory and Practice

The People CMM: A Framework for Human Capital Management (2nd Edition)

COMPETITIVE ADVANTAGES

Your company don't need to be the best of the world, but must know their Competitive Advantages, so if you never dedicated time thinking on them, it's time to start, putting them in your Strategic Planning. However it can take months or years until you figure out what are your core advantages.

Begin looking for the "Competitive Advantages" asking:

1. On what, my company is the best? 
2. Why customers rent, or buy, from us?

Do this constantly until you have clearly identified the core advantages. Involve your team to help you find out the right answers, listing them as below:

On what, we are the best?	Why Customers rent, or buy, from us?
Making customers happy	They love our 100% dedication to understand and meet all their needs
Providing the best vehicles for safe driving	They know that our vehicles are in the fleet until 9 months or 100000 km of use, receiving periodical maintenance
Retaining the best professionals	They have experts and dedicated professionals, who understand the industry and their needs, always ready to help them
Controlling costs and calculating sales prices	They know that we offer the best prices, getting the best services and products
(...)	(...)

Maybe your list will be larger than this above, however after months or even years, you will reduce the items, getting focus actually on your Competitive Advantages.

THE MACRO-ENVIRONMENT (PEST ANALYSIS)

We have here another acronym of a useful tool, and framework, to understand either the growth or downturn of a market, doing a scan of the external macro-environment of your company. The PEST Analysis stands for:

• Political
• Economic
• Social
• Technological

Whereas SWOT Analysis will help to measure a business unit, idea or project; PEST Analysis will help you measure a market or a contextual environment.

In spite of there are variations for the PEST acronym, being very common STEEP, PESTELI, etc, adding  factors like Ethical, Environmental, Ecologic, Legal, International, etc. It is an unnecessary job, because all them can be assigned to one of those PEST factors – Political, Economic, Social or Technological. My preferred is always the use of originals: PEST or STEP. Use whichever is easier to remember, avoiding the variations. See figure below with some important factors that you can consider, as well as others can be added.

• Political
• Environmental regulations and protection
• Legislation to the industry
• Regulatory bodies and processes
• International trades and regulations
• Contract enforcement law
• Government policies:
• Government term and change
• Trading policies
• Funding, grants and initiatives
• Lobbying/pressure groups
• International pressure groups
• Wars and conflict
• Political stability
• Economic
• Economic growth/downturn
• Home economy situation
• Home economy trends
• Overseas economies and trends
• Inflation rates
• Unemployment policies
• Taxation
• General taxation issues
• Taxation specific to product/services
• Seasonality/weather issues
• Market and trade cycles
• Specific industry factors
• Market routes and distribution trends
• Customer/end-user drivers
• Interest and exchange rates: 
• International trade/monetary issues
• Social
• Lifestyle trends
• Income distribution
• Demographics
• Social mobility and labor
• Work/career and leisure attitudes 
• Entrepreneurial spirit
• Consumer attitudes and opinions
• Media views
• Law changes affecting social factors
• Brand, company, technology image
• Consumer buying patterns
• Fashion and role models
• Major events and influences
• Buying access and trends
• Ethnic/religious factors
• Advertising and publicity
• Ethical issues
• Living conditions
• Technological
• Competing technology development
• Research funding:
• Associated/dependent technologies
• Replacement technology/solutions
• Maturity of technology
• Manufacturing maturity and capacity
• Information and communications
• Consumer buying
• Mechanisms/technology
• Technology legislation
• Innovation potential
• Technology access, licensing, patents
• Intellectual property issues
• Global communications
• Energy uses and costs
• Total Cost of Ownership
• Changes in Information Technology
• Changes in Internet
• Changes in Mobile Technology
• Rate of technology transfer

PEST factors are important role, however they are beyond the control of the company, normally must be considered as either threats or opportunities, which can be applied in the SWOT Analysis. They are macro-economic factors, so they usually differ per continent, country or region. They are virtually unlimited. The firm must prioritize and monitor those factors that influence its industry/company. Below an example for a car rental company in a country in the American continent, outside Brazil and USA.

Maybe you figured out that PEST Analysis can vary from business and strategic planning, marketing planning, depending also of the product and service of your portfolio, therefore you can reduce or increase the list of items for each factor.