Recently while visiting a friend’s home, I admired a 4-by-8 feet model train layout that occupied space on the den floor. An HO scale model train configuration sits in my basement. The fascination of trains, their aura and history offers valuable lessons to business owners.
To understand trains, specifically passenger trains, requires knowledge of economics and the law of supply and demand. From the mid-1800s until post World War II, passenger trains were the standard mode of transportation for long distance travel in the United States.
Prior to and during World War II, air travel was a distant second place to rail travel. Railroads such as the Union Pacific, Southern Railroad, New York Central, Baltimore and Ohio, Pennsylvania and Southern Pacific ran numerous passenger trains across the country.
Massive terminals named Grand Central Station, Penn Station and Union Station were points of destination. Train travel held the lion’s share of the passenger market.
After 1945 and into the 1950s, airlines began to slowly make gains into the traveler’s wallet and pocketbook. With blinders on, passenger rail service became complacent. Passenger rail equipment was not improved; freight trains became more prevalent and were wearing out track. Airlines were making a transition from prop-driven planes to jetliners, thus making trips more economical.
By the 1960s and early 1970s, airlines were traversing the globe in Boeing 707, 727 and McDonnell-Douglas DC-8 jets. Rail service was all but extinct until the U.S. government created Amtrak. As they say, the rest is history.
What are the lessons to be learned here?
You cannot rely on past performance as a guarantee for the future. The popular question that is asked quite frequently today is "What have you done for me lately?"
Stagnation with no vision for the future will produce only one thing, a sign that reads "Going out of business sale."
What does the public want? A simple concept that is easily forgotten. Ask your customers what they want and give it to them at a fair price, in a convenient location and never stop telling them that you are there for their wants and needs.
Know your competition. What are their strengths and weaknesses? Where are their soft spots that your business can take advantage of?
Know your friends better than you know your enemies.
Take a close look at today’s airline industry.
J.C. Smith is a consultant for the Gainesville district office of the University of Georgia Small Business Development Center, 770-531-5681; His column appears Tuesdays and at gainesvilletimes.com.