Business Planning Critical to Future Success
by Richard D'Ambrosio /
As calendar pages quickly turn towards a new year, some travel agents are considering their long term plans for 2018, and how they are going to invest in and grow their business.
While experts and agents have varying opinions about when to conduct strategic planning, and how to do it, all agree that having a foundational business plan that is regularly reviewed is critical to success.
“You should be asking yourself, ‘What did I do last year? How successful was my marketing? What are my best sales categories? And what do I want to accomplish next year?’” said Guida Botelho, CTA, director of training at The Travel Institute.
“Most agents are thinking about where the next sale will come from, and not about how to build a pipeline of clients and potential clients already interested in traveling,” said Dan Chappelle, consultant and president with his own firm, The Wealthy Travel Agent Sales Academy, based in Bellevue, Wash.
Instead, experts said, agents should have a 3-5 year plan broken down into smaller time spans tied to actions they can perform. “If you say you want to earn $75,000 a year in three years, where do you need to be in one year, two years?” said Jackie Friedman, CTC, CTIE, and president of Nexion. “I always tell agents, you need to work on your business and not just in it,” Friedman said.
Chappelle isn’t as certain about 3-5 year plans, but recommends, at a minimum 12-18 month plans that get down to the level of detail that reveals how much income is brought in, and at what expense. “Gross sales are important only to your BDM and suppliers. What you need to know is your cash flow, commission revenue, expenses, how much income you need to break even.”
Plans set apart hobbyists from professionals
Part of the reason why business planning is so hard for many travel agents is that their passion for travel is their primary motivator. “Agents need to be reminded that yes, they have a love for travel and serving their clients, but they are business owners and have to understand how to invest money to earn money,” Friedman said.
If an agent has a natural aversion to business planning, but their business is a significant or primary income for them, they need to find someone who is comfortable and willing to engage in planning with them, Friedman said.
“Maybe they take on a business partner who loves travel but has a finance or accounting background,” Friedman said. “I know a number of husband/wife teams where one is the agent, and the other spouse looks at it from a business perspective.”
Emily Rawlins, owner of Merriway Travel in Sacramento, Calif., works with her husband, who is very comfortable with QuickBooks and likes analyzing data. “He makes pie charts for us, and we look at trends in the business together,” she said. Logging business planning time with him quarterly and annually “really sets me apart from the hobbyist,” Rawlins said.
Still others may need to simply pay for professional advice. “For a number of folks, it’s best if they hire a coach, someone who can teach you the basics, the disciplines, or at least point you in the right direction,” Chappelle said.
Friedman said she sees agents more interested in business planning when they struggle with how and when revenue hits their bank account.
“You need to know that you are not going to realize revenue until the time of travel or in some cases after travel. For a cruise or vacation package a client is taking in March, you won't see the money until January and in some cases April,” she said.
Agents looking to smooth out their cash flow should incorporate selling travel insurance into their business plan. “It’s not only smart for the customer, but you the agent get that revenue closer to the time you sell the policy versus when the client travels,” Friedman said.
As agents look at their cash flow, they also likely will see the importance of charging fees upfront and choosing the right vendors to work with, Friedman and others said.
“There is a huge opportunity for your business knowing what you make from a particular client and what types of bookings take what level of work,” she said. “It helps you ask the right questions, like ‘Am I charging the right fees? Are there types of bookings distracting me from where I want to spend my time more profitably?”
Reviewing your business plan also should reveal who your most profitable suppliers are and help you understand the role they play in your sales and your income, Chappelle said. For example, “Are there co-op marketing dollars or other support a supplier can provide to help build your business? Choosing suppliers should be a part of your business planning process, and not a knee jerk reaction the day they didn’t pick up the phone fast enough.”
You cannot manage what you cannot measure
To collect this level of detail, agents and experts said, agents must have the day to day discipline that ensures they are accurately recording bookings, client interactions, posting sales in their back office system, etc.
For example, existing sales data and your CRM can tell you what your best customers look like, Chappelle said, enabling an agent to build their marketing and sales plan. “That plan can then include where you are going to find these prospects, the events you want to plan throughout the year to attract these clients, and how much that will cost,” he said.
Both Chappelle and Friedman said that once an agent sees the paths to profitable sales, you need to put in place the tactics to achieve your goals.
“If your business plan needs new customers, then set aside the time, an hour, half hour, every day, to reach out to existing clients for referrals, and work your old leads,” he said. Chappelle calls sales and prospecting “the Golden Hour” that should be included in every agent’s day. “Protect that time.”