The Economics of Miniature Railways - John Caldwell

Published in Australian Model Engineer, September 2009

I don't think any of the ideas presented below are particularly novel but there may be a few ideas you can use to improve the finances of your club.

Background on the Nelson Society of Modellers

The Society has just celebrated its 50th anniversary. It originally encompassed all sorts of modelling. As we are situated under an aircraft flight path, the model aircraft people cannot fly from our site. They have formed their own organisation but continue to use our club rooms for their meetings. We have a two acre boating pond. While it can be used by model yachts, they find the wind around the trees to be a nuisance. They now have their own facility with deeper water and clear breezes. This leaves us with a few people operating model power boats, some OO layouts in the clubhouse and the locomotive group. We also have a paddle steamer that takes people for rides on the pond. We have about 50 members of whom we regularly see about 15. The track site is on about 5 acres of a much larger public reserve, with the pond in the centre. We pay a lease to the City Council for use of the site. Nelson is a city of about 35,000 with as many again in the surrounding area. This gives an idea of the size of the community we serve. Our facilities include a raised track of 520m with all gauges to 7 ¼" built about 25 years ago, a ground level track of 920m 7 ¼" only, the boating pond and a clubhouse that provides space for a model museum with the OO layouts and a meeting room. The museum space is open to the public when we are there on a Sunday afternoon. We have a general meeting and a committee meeting every month. We have working bees every Wednesday and Saturday morning. The Wednesday ones started as a social get together. The Saturday ones are for those members still in the weekly work force to be able to participate in projects. The work is a combination of maintenance and new work. There always seems to be a list of things to be done.

Why run a railway for the public

Putting something back into the community

We get a lot of fun from our hobby. The children we take around get a lot of enjoyment from train rides too. I often get comments from parents on what a great facility we provide. I also get comments from our members on the delight they see on children's faces. We get a lot of families appearing for rides every week, which is some measure of the regard with which the public see us.

Removing the burden of high subscription fees on members

If we did not run trains for the public, the cost of subscriptions would be prohibitive. Either that or there would be virtually no facilities.

Provide funds for projects

By having an income from the public it means that we are self funding. It means we can go ahead on a project without having to worry about how to pay for it. For major projects like building the clubhouse, we have applied for grants and loans from various organisations. When I have compared our wants to the needs of other organisations in the community, I see their needs as far more deserving of distributions from charitable trusts. I personally feel rather embarrassed to ask for money in the context of some of the other organisations in our community which have no regular earned income. We have had great support from various businesses in the area usually in the form of discounts or the use of machinery without charge. Recent projects include the ground level track, storage sheds, an extension to the ground level track which includes a bridge, a tunnel and an overpass and now an improved unloading facility. Grants have probably contributed 15  20% of the costs, the balance being our income from the public. Being an incorporated society means that all income goes back into the club to maintain and improve our facilities.

Setting prices

For a long time we held our prices at 50c per ride. I can't find a record of when it last changed but it must have been about 15 years ago. After a lot of opposition from within the club, we recently lifted the price to $1 per ride. There is a concession rate of 6 tickets for $5. The reaction from the public was mostly along the lines of 'about time' and 'good on you'. To put this in context, an ice-cream currently costs $1.80. Most other clubs in New Zealand already charge $2 per ride. The argument for keeping prices low goes like this. For a large family on a small income, all the children can have a ride. A more affluent family may have several rides per child. Either way between us and the demands of the children, we will empty the parents' pockets of loose change. Besides it is much more fun going around the track with a load of passengers than going around with an empty train.

Be there every week

I think this is the key to a regular income. We operate every Sunday afternoon year round, weather permitting. Surprisingly we do better business in the winter months, probably because we are not then competing with summertime outdoor activities. Some clubs operate every second week, maybe the first and third week of the month. This means that if a member of the public turns up on the 'off' week they may think, 'Oh, they can't be running any more' and never come back. If the 'on' week happens to be wet, it can be a month between runs.

Birthday parties

We have 5 picnic tables beside our clubrooms. These can be used by up to 5 different birthday parties on one day although it is usually only one or two. We have a 6 clip ticket at $4 for birthday parties. This is a deeper discounting than normal but we see this as a form of word of mouth advertising. With 10 or more children being invited, there are bound to be some parents who don't know we exist. This provides them with an introduction to us and leads to an expanding client base. We offer the use of a sun umbrella to keep sun off the food. We ask that all rubbish is taken away. So apart from providing the tables, it takes no effort on our part to host a birthday party.

Pre-school runs

In the lead up to Christmas we offer, by prior arrangement, an hour of train rides for a group of 30  80 pre-school or primary school pupils. This is seen as an out-of-classroom special treat. It does require adequate supervision by teachers and other care givers but that is taken care of by the contact teacher. For us, it is very simple. Have 5 or 6 members available for an hour or so at a pre-arranged time during the week. There are 4 club-owned petrol powered locos so we can set up for operation in 15 minutes. We give a short briefing to set the ground rules (queuing, keeping hands in and feet on the foot boards, etc) and run for an hour. There is no limit on the number of rides per child. For pre-schoolers, that is long enough for one session. Sometimes Santa makes an appearance but that is left to the school to organise. Then we collect a cheque based on the number of children. Again this is a form of word of mouth advertising and is similarly discounted.

Night runs

These are great fun for members as well as the public. Train rides in the dark add another dimension. We run two per year, at the change in daylight saving. They are on the first Saturday after daylight saving ends in the autumn and the last Saturday before daylight saving starts in the spring. The idea is for it to be dark early but not too cold. If it were more frequent, it would lose its novelty value. We run until there are no more passengers, usually about 9pm. Some children arrive in their pyjamas, ready for bed as soon as they get home. We have had as many as 1200 passengers though in that time.

Advertising

We have had great support from the local papers, a daily evening paper and a weekly free paper. Although we do purchase some advertising space, by far the best publicity is an article with photographs in advance of an event, like a night run or our 50th anniversary weekend. We treat those articles as a privilege not to be abused, so we don't ask too often.

Goodwill and the benefits of not rostering

Running trains on Sunday afternoons relies on the goodwill of members to provide the manpower to operate. We don't have rosters. That seems to create an obligation to be there, which removes the voluntary aspect of it. It also creates difficulties if someone can't be there and they can't find a substitute. It can also create a sense of imposition in the person who is called in when it is not his turn. So, we operate without rosters. There is no obligation to turn up, but we encourage members to do so. For me, if there is a family event happening then family comes first. Most of the active members are there every week. I'm there most weeks. Some members are only occasionally there, but that's OK too.

The social aspect

Working alone in your workshop is a solitary and isolating situation. Belonging to a club and being involved in it brings friendly interaction with a group of like minded individuals. Let's face it, we are mostly a group of older men. Having the purpose of providing train rides for the public gives a focus to the operation. It is also our hobby and we are there for our enjoyment as well as the public's. A chat over a cup of tea with friendly discussion and banter is a good thing. Hmm, is that an argument or a robust debate I hear? We are all individuals with different strengths, skills and interests. It is the combination that lends the organisation its strength.