Here we are in the fourth quarter of 2019, already. Where did the year go? This is typically the time when the management teams of businesses cloister in their conference rooms to take stock of their market position and profits, analyzing performance from the past year and planning where to go from here.
How did your travel agency fare this year? Do you have a core client base, steady sales, good profitability, and you’re humming right along? Maybe it’s time to consider scaling up your business, taking it to the next level, as the new decade starts.
One proven way to scale up is by implementing the associate agents business model, which has been gaining ground in the industry. In fact, most established host agencies have supported this business structure for quite some time.
What is the associate agents business model?
It’s all about increasing your network and reach by adding associate agents, or independent contractors (ICs), to your agency. Essentially, they are travel agents who maintain their independence, but work with you and add to your agency’s bottom line. They might function as an extension of your business, or maybe they’re starting their own agency and you’re training them. It’s up to you, as the agency owner, to decide how best to incorporate associate agents into your business. The particulars may vary, but the common ground is that it’s always meant to be a mutually beneficial business arrangement.
“I’ve been able to effectively scale my business by adding independent contractors,” said Michele M. Cartwright, CTA, president and owner, Destinations by Design, in White Rock, South Carolina. “I am able to provide more technology and tools to my agents as we share the expenses of the tools — a benefit they would not have on their own.”
Cartwright went on to explain: “The cost of doing business with a one-person agency averaged significantly more than our current per agent average. Instead of one agent paying for a toll-free number, website, secure forms, etc., we now pool the costs at a significant per person discount that benefits every agent on our team. This allows us to provide an incredible array of products with the added benefit of serving our clients more efficiently and effectively without adding a significant expense.”
Cartwright has a handful of ICs working under her agency’s umbrella, and she plans to expand its IC staff. She said her experience of adding associate agents to her team has been “incredible! They are excellent advisors to their clients. This has truly helped grow our business overall and increases the awareness of the benefits of using a qualified travel agent.”
Scott Asplund, manager, Plenty of Fun Travel, based in Coppell, Texas, also uses ICs, but his business model looks a bit different. The agency has about 185 associate agents located around the country. He said, “We are always adding new people to keep on growing and replacing people that move on.
“I have a large number of agents that are close to retirement age and that want to be full-time agents in the future. I also have a number of younger agents that work part-time, and it helps balance out our team.
“For the most part, it is a very positive thing. It took a few years to learn what the best people for our group have in common and to concentrate on adding people that fit in good.”
How do you train ICs?
There’s no way around it … to make the IC model work, you have to devote a significant amount of time to educating and training new associate agents.
“I work very hard to train our associates,” said Cartwright. “It is a lot of work to properly train an IC, and I only add them when I have the time to train them effectively.”
Cartwright said she takes “baby steps” with their training. “There are two major approaches that our agents receive: Booking travel for their clients and the backend office procedures. Destinations by Design has a manual to assist our agents, bi-weekly video conference training calls, and unlimited support.”
Asplund offers training from suppliers and his host agency, plus he has three or four training events a year just for their group; and, of course, exclusive fam trips and agent cruises are offered.
What skills, traits, and experience should you look for in an IC candidate? Asplund said: “They need to have attention-to-detail skills, and people skills, and sales experience is a huge plus. Learning the travel business is a lot easier than learning how to sell and be personable.”
A few warnings
Take it from those who have already been there and done that, there are some things you have to be careful of as you expand your agency with ICs.
Cartwright offered: “Do not underestimate the time it takes to train your ICs, and the continuing education, payroll, etc., you will encounter in your business. To do it well, you must be willing to invest the time and talent in your team.”
Asplund recommends: “Learn the IRS rules and all the liability you face when adding people. Ten percent of salespeople make 90% of the sales, so you need to have a number of people to have 20 successful ones. You have to offer more than they would get being direct with a host agency, or they will just leave you and move on.”
Also, if you do go this route, check in with your legal counsel so that you have a contract drafted and signed that protects your agency and your interests. The American Society of Travel Advisors (ASTA) also has a contractor template in the Resource section of their site.
Bringing on associate agents is one of the most efficient and cost-effective ways to scale your business upwards - and it helps to add longevity to your business. Having more quality agents onboard translates into more sales and strong client relationships - which circles back around to generate even more sales. If the idea piques your interest, consider setting out to do your own research this quarter, so you’re ready to roll into greater profitability in the new year.
FROM THE SPONSOR: At Travel Planners International, you’re more than just a travel advisor. You’re a small business owner who is curating experiences that have an impact on the people you serve. For the last 30 years, we’ve believed in, guided, and championed the small business owner – and we have no intention of stopping. So, along with competitive commission plans, profit-generating marketing programs, and access to cutting-edge technology, we give emerging entrepreneurs the tools, guidance, and confidence to be successful and to harness their entrepreneurial spirit. Plus, with our #BetheCurator campaign and Tourism Cares, our 2019 Signature Charity, we’re elevating our 4,000-plus community of agents to a platform where they can truly change the world around them. But, don’t just take our word for it. Visit travelplannersinternational.com and let’s get you where you want to be.