How to Run a Travel Agency in 2022-2023?
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When it comes to travel agencies, you may assume that having a business plan is outdated. If you are going to open a storefront agency or a franchise, you will need some capital from bank or investors, so a business plan is a necessity.
Do note that most of the travel agencies are home-based, the average start-up cost for a non-franchise travel agency is $1,563. If you are unable to get a loan, try to find out whether you actually need a business plan or not.
If you are going to start a travel agency, here are a few reasons why creating a travel agency business plan might be beneficial for you in the long run:
The first one is the practical aspect which will help you feel prepared and confident as you make important business decisions.
The next one is inspirational aspect which will help you to remind what is it that inspired you to start a travel agency and what kind of impact you hope to have on your clients.
A travel agency business will help you to describe your agency and the services you are going to provide, the market in which you are operating, the money you require to get started, the people you will need to help you grow your business, etc.
What we are telling you is that a thorough planning will help you feel more prepared and confident.
Now that you aware of the basics of how to run a travel agency in 2022-2023, without any further ado, let us look at the various steps you have to follow to create a proper travel agency business plan for yourself.
Start with naming your business
In this section of how to run a travel agency, we are going to know more about how you are going to name your new business in the beginning.
Do note that any overview will be like an executive summary that will summarize all the aspects of your travel agency business plan.
You can consider this as an elevator pitch of your travel agency business plan. Our advise for you is to do these summaries last, since you will have all the information at your fingertips that you will need to summarize.
Do not know how to name your business? You can read our article on how to name a business in 2022-2023 to learn more.
In terms of location, jot down for yourself whether you want to go for a house, a PO box, your sister’s place or any other place in the world.
Next step is to find out your travel niche. Specializing as a travel agent has become more important as ever. You have to understand that selling travel is about much more than booking.
It is about bringing knowledge, expertise, access, and resourcefulness to the table. All these qualities will help you separate you from an OTA.
Next step is to find your target clients. Note for yourself, are they families, LGBTQ, cruisers, boomers or millennials.
Answer for yourself who do you imagine your client to be and how will this shape the way you develop your travel agency.
Next up is understanding your competition or your industry peers. Also, note down for yourself what might your customers consider if they do not see you as a travel agent?
The expertise of Management Team will also effect your business, so a good and experienced Marketing Team is a must have.
A Travel Agency Mission Statement will help you remember why you started this business in the first place, and remind you what kind of impact you hope your business will have on others.
Understand the business foundation
In this section of how to run a travel agency, we will provide you some background on your travel agency. And if you are brand spanking new, much of this information will be provided in the overview.
This section will include legal structure which will tell you about what type of business is your agency, LLC, sole proprietorship, S Corp, or has it changed over time or not.
Next up is understanding the agency founders and their role in the formation of travel agency or understanding who are the founders and what are their roles?
What will be your products & services?
If you want to know more about how to run a travel agency, this section will be very important for you.
It is our humble advise that you should begin to think about developing preferred supplier relationships with your travel agency.
In addition to planning and booking travel, it might include coaching clients to book their own trips, trip consultations, wedding planning, providing education, training or mentorship to other agents, facilitating educational webinars speaking at industry events.
These are the different types of products or services that you can provide to your customers.
The sales projections will seem hard if you have not booked any travel but consider what kind of travel you want to sell in the first place.
Answer for yourself how many clients are you going to book, how many trips do you aim to sell weekly/monthly/annually, etc.
It is no doubt a good opportunity to make financial goals for your travel agency. Jot down for yourself what kind of annual income are you aiming for, how much would you have to sell in one year to reach that?
If you want to provide multiple services as a part of your travel agency business, jot down what is the breakdown among those different services?
Now that you have dug enough into the basic details in this section, let us now move on to the next section of your travel agency business plan.
How will you manage the management system?
In this section of how to run a travel agency, you will learn how are you going to manage your management system.
Start by answering these following questions first, such as which host agency or franchise do you belong to, if your host belongs to a consortium, which one it is, or what travel organizations you are going to be a part of?
If you are an independent agent, these outside organizations will not have a direct stake in your business, but they may influence your day-to-day operations in some way.
If you want to run your business solo, you can stop here, but if you have or want to take on sub agents or employees you will also need to go into more depth with your travel agency management structure.
Some things you have to keep in mind are, if you can, do make an organizational chart of your travel agency. This will help you visualize who the players are and what roles are are they going to serve.
Note for yourself what value do the different management positions add to your travel agency or what are the responsibilities of their positions?
You should also describe other ICs or employees their responsibilities and how will they compliment what you do for your agency.
If you have sub agents or employees, you can break down the overall payroll expenses. Jot down for yourself what is their compensation, a commission split, a base salary, a combination of the two, will you provide any bonuses or benefits if you have employees or do you anticipate any future additions to your staff?
Know who is your office mascot?
In this section of how to run a travel agency, you will realize how important it is to know who are going to be your office mascots.
This is a very important factor in building a business plan. Try to find out how are you going to get up and work every morning without a dog pushing its cold nose into your face, or without a cat trying to use your neck as their personal radiator?
What will be your marketing strategy?
If you really want to know how to run a travel agency properly, this section will help you clarify some of your marketing doubts.
Start this section by answering some questions, such as who are your major clients? You can include names, location, and what kind of travel do they prefer. Have they provided any referrals for your business or not.
Next up is noting down who are going to be your prospective clients? Do add who might be other potential travel clients for you, are they parenting class members, or your yoga class, are they regulars at your favorite bookstore, or do you have a way to informally see how they might respond to your travel services?
When making a marketing plan, consider some essential things, such as your pricing, how do you want to market the clients, what region do you belong to, or what will be the flow of your services during planning, travel and post-trip, how do you plan on getting feedback from your customers once the travel is complete and so on.
Know the technology
Find out what kind of technology do you need to help your agency get up and running, and what technology will you need to keep your travel agency machine humming?
You don’t need everything at once, but you’ll want to have an idea of what you need to reach some travel agency milestones you’re going for.
You might want to consider making a travel agency website. Some sources for creating your website are Wix, Weebly, or you can read up on different website options for agencies.
Do not forget about the Customer Relations Management (CRM). Go for sources like AgentMate, ClientBase, ClientEase, TESS, or Travel Joy.
You can also go for online scheduling tools, such as Acuity.
Consider using itinerary builders, such as Axus Travel App, IT explorer, Travefy, Umapped or Vamoos.
You can also go for payment processing for fees, such as FreshBooks, PayPal or Quickbooks Payments.
You should go for Bookkeeping and Accounting, such as AgentMate, Excel, Freshbooks, Google Sheets or Mac Numbers.
You can go for Invoicing resources, such as AgentMate, Freshbooks, Quickbooks Online, TESS, or Travel Joy.
Another thing you can go for are booking tools such as GDS. You can use Google Workspace in terms of Email as well.
The other equipment you should be aware of are eFax, FaxZero, Scanner Pro, Tiny Scanner or a Business Card Scanner such as Google Play Store.
Just because it is technology, it does not mean it has to be state of the art or über fancy.
You can choose to pick where you want to allocate your financial resources on technology.
Jot down which of these technologies you are actually going to need, if you go with a host agency or consortium, which of these technologies do they provide.
At last, make sure to iron out how you are going to run the agency. Now that you have a good idea on the kind of technology you will be needing for your business, it is time to move on to the next section of how to run a travel agency.
How will you manage the operations?
Building a proper plan for a travel agency operations will help you in understanding how to ensure that your business runs smoothly, in addition to understanding the capacity of your travel agency.
In this section of how to run a travel agency, you will be getting enlightened on how you are going to manage the operations.
Jot the answers of some questions, such as what is your sales volume compared to your sales capacity, how much travel can you actually sell in the time you want to spend working to sell travel?
Who are going to be your preferred suppliers, who are going to be your host or consortium’s preferred suppliers, how does this impact your bookkeeping and workflow?
If you are going to book groups, you should plan ahead. Find out are there any special cruise sailings or new ships you want to block space for? Is a resort opening a new property that you are excited about and might be in high demand? Is there a new exciting product coming up that you want to get ahead of?
If you want to find out about some of these opportunities, note down for yourself what travel publications do you want, or need to subscribe to, or how are you going to utilize your host or consortium resources to stay ahead?
If you are a business owner, you will find a number of external organizational support as you go ahead with your travel agency business.
Start by focusing on the financial logistics. Find out the answers of some questions, such as what are the business names and addresses of some of your administrative support? This will include your bank, accountant, host agency or the legal counsel etc.
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