How do I get started?

[Tony Capitalist]

Hi there. I'd like to own my own railroad system, but have no idea where to get started, so I figured I'd seek out a forum for railroading and ask folks who probably know more about it. In short, I'd like to set up America's first high-speed maglev train system.

[John_Perkowski]

Let's start with your vision

You need two destinations. Let's call them DC and NYC.

You need to buy land, a lot of it. It's called obtaining right of way, and you cannot expect government to condemn private property for you.

You will need an engineering plan that describes the route, the acceptable grades, the curvature of turns in the route, intermediate stops, the equipment, ...

You will need a business plan that describes this elephant, each bite at a time.

You will need a prospectus that describes how you're going to raise money and spend it.

So, my first two questions:
- Do you have very good friends who are a civil engineer, a mechanical engineer, a CPA, a lawyer?

- Do you have your MBA and a proven track record at raising 100s of millions of money?

[John_Perkowski]

ADMIN NOTE

For the purposes of business development and planning, a mag lev line is sufficiently similar to tradition steel rail railroading, we've decided to let the conversation go forward.

[mtuandrew]

Quick question: is "Capitalist" your middle name, Mr. Stark?

Moderator Note: let's treat this as an object lesson in how to build a system, not a reason to dunk on Tony Capitalist (beyond good-natured ribbing ) It's a good hypothetical.

[ConstanceR46]

Alright, so you Wanna Build A Maglev.

First of all, unless you'd wanna sink R&D into a maglev system of your own, you'd have to license technology and designate a site for producing trains (i.e buy american.) Then you'd need to produce a presentation and attract investors; you'd need every last inch of the route's specifications. You'd then need to find 2 destinations (NYC and DC is a good hypothetical); and get approval and ecological studies; in addition to buying up real estate to put terminals and maintenance facilities in. After you did that, you'd have to find a ROW; and on the northeast that means fighting tooth and nail with NIMBYs; and sink money into securing it. You'd also need to check with municipal govts your line goes thru. You'd need to fabricate and put together the track and substations for it; in addition to planning and building the stations and the associated studies. If that all happened; you'd have to hire staff and advertise your railroad; could it beat regional airliners? Hiring staff would involve training people to operate Maglevs and how to maintain maglevs; it's a whole different horsey than steel-on-steel.

Now, if you'd want to do that, you'd need a proven track record and a lot of money.

[djlong]

Even if you COULD buid it, you need to do the research which asks if you SHOULD.

Market research.

1) Figure out how much it's going to cost to build your line.
2) Double it.
3) Figure out how much service you're going to offer - how many seats per hour?
4) Figure out how much you have to charge for those seats in order to stay in business.
5) Figure out if there is enough "market" to support your venture. If your construction and operating costs are so high that you need to sell more tickets than you figured in #3, you're toast. If you have enough seats but not enough people to buy them, you're toast.
6) Compare the price of your ticket to the price of tickets from Amtrak, Delta, JetBlue, MegaBus and others - and see if you're competitive.

[mtuandrew]

7) double the price again once you announce the project, because every landowner en route will see dollar signs
8) go walk the Lackawanna Cutoff and ask, will my project still be relevant in 100 years?
9) research whether other modes are planning “good enough” upgrades that will cannibalize your market

[John_Perkowski]

Even if you COULD buid it, you need to do the research which asks if you SHOULD.

Market research. (snip)
6) Compare the price of your ticket to the price of tickets from Amtrak, Delta, JetBlue, MegaBus and others - and see if you're competitive.

6a) Multiply your ticket price by 0.75, since your competitors will react to your market entry, and attempt to take market share, by cutting their prices.
6b) Recalculate your gross revenue and compare against costs. If revenue < costs, you're toast.