Another business question

[ftgokie]

<-----First off, my wife thanks you all for your help

My wife just finished travel agency school and we are contemplating opening up a travel agency in my hometown. I have lots of family and friends that travel and have said if we can compete with the neighboring cities travel agency they would go with us simply because they want to do business with friends.

I also work at the Dept of Veterans Affairs here in Muskogee and there are approx 1400 employees here and I know I could get some business from work if I posted flyers because many of people here travel pretty frequently to Las Vegas, Cancun…etc

We were also considering doing a lay away for trips to attract business. Also considering as a grand opening giving away a trip for 2 to Cancun for a weekend. I think that if we can get people in the door with that giveaway, we may be able to get some people interested in the layaways on trips and it may end up drum up more business.

My uncle owns a construction company and he has built a new building right on the main road that will hold 6 small businesses and he said he would give me a good deal on leasing the space if we gave him the best deal we could on trips for him and his wife.

I basically have no debt, I own my own home (built in 2008) and my old home is a rent house that I get $750/month for rent. My truck, car, boat and my Harley are all paid for..so I think we shouldn’t have a problem.

Any advice anyone can give me on the ins and outs of being a business owner? Frankly, I am kindof scared to do it because I have never done something like this. My wife will be the main one there during the day and I will help out on my days off and on the weekends, its just a major step for us and if there is any advice anyone can give me on what to do and what not to do would be most appreciated.

Shawn

[JUSTROLEXES]

Hello Shawn,
opening a business in today's market is a great thing as you can benefit from a lot of things like low rent,low deals on flyers and stuff low office equipments...
in few words keep your overhead as low as you can and stay away from the layaway idea as that will hurt you more then benefit you.
Also try to bring in customer outside of your network.
try to make a plan and study your numbers... how many deals you need to close per month to cover your expensises? use logical #s...
If might be a good idea to have your wife work at another travel agency for few months as well to get a feel of how they operate...
Best of luck

[Lucky777]

Shawn,

The very best thing I have decided to do is starting my own business. It is certainly not easy, but is truly a labor of love. I started mine fresh out of college, and 6 years later I'm still here. You will make mistakes, but learn from them. Learn to crawl before you can walk. Keep overhead low, and always stay true to your gut. I've seen many businesses come and go, with many new business owners thinking money just rolls in. I've had many sleepless nights, screaming matches, cried myself to sleep after having a client default and leave me with a huge unpaid balance only to file bankruptcy, but in the end I LOVE it. The best piece of advice I can tell you is to get a good attorney and draft up all your operating agreements and contracts. It costs more upfront but in the end it's saved hundreds of thousands of dollars in the long run. Best of luck! Go for it !

[doubleinfive]

First thing you should ask yourselves is "why do we want to do this?" Are you looking to own a business or own a job? There's a big difference between the two.

Owning a business is one path to financial independence, but in reading your post, it appears that you've already achieved that. So, going back to the original question, do you know why you want to do this?

[Kingair]

Why not ?

As mentioned . . . try to keep overhead cost as low as possible . . .

I am not in the travel business and don't know the rate of profit . . . but I wish you good luck !

And if you really want to go for it . . . you'll make it for sure

HAGOne



BTW : any chance that TRF members get a discount ;-)

[ftgokie]

Originally Posted by doubleinfive

First thing you should ask yourselves is "why do we want to do this?" Are you looking to own a business or own a job? There's a big difference between the two.

Owning a business is one path to financial independence, but in reading your post, it appears that you've already achieved that. So, going back to the original question, do you know why you want to do this?

Thanks everyone for the input, its greatly appreciated.

Why do we want to do it? My wife has always wanted to be a travel agent, she loves to interact with people and she wants to make people happy. She wants to own a business to give her something to do and a way to meet new people...she is a huge people person and she could make friends with anyone..she just has that special something about her..kinda freaky

Me, I would like to own a business because it will keep her busy, she is strong willed and if she wants something, she will find a way to get it. We love to travel, so bacially we can travel a little cheaper I am guessing and we can see parts of the world and give people real advice as opposed to a travel agent thats never been anywhere telling you what you should and should not see.

When I travel, I am always going to out of the way places, off the beaten path, so I think we will be able to offer something unique to people around here on some ideas for some trips.

Basically, she said she wants to help people to travel and be her own boss. granted, the boss is ultimately the customer, but she has wanted this ever since I met her 18yrs ago and we just sat down one night and I said, if you want to do it, lets go for it.

Might not be the right answers on why i/we want to do this, but thats about as honest of an answer that I can give.

[ftgokie]

Originally Posted by Kingair

Why not ?

As mentioned . . . try to keep overhead cost as low as possible . . .

I am not in the travel business and don't know the rate of profit . . . but I wish you good luck !

And if you really want to go for it . . . you'll make it for sure

HAGOne



BTW : any chance that TRF members get a discount ;-)

We are going to have a website once we get up and running and I will post it. We are not in it to become rich, just to cover our expenses and pocket a little money so we can travel more...I would have no problem with offering a discount to TRF members.

[JasoninDenver]

1. Read "The E Myth" by Michael Gerber.

2. Get a good accountant.

3. Decide then whether you want to open your own business.

After being self-employed for more than 15 years, I would rather sleep in my car than work for someone else.

[gettocard]

Opening a travel agency in an era were people log online for their travel needs is going to be a risky bet. I've seen a lot of travel agencies/offices shut down in my city for the past 10 years. Do a lot of research before doing this move,as I see it unless you sell some very ultra exotic products like Everest climbs or five star vacation it's tough to compete with names like Kayak. Best of luck,there is nothing like being your own boss

[ftgokie]

Originally Posted by gettocard

Opening a travel agency in an era were people log online for their travel needs is going to be a risky bet.

I agree and we have thought about that..we have decided we dotn want to become rich off doing this, if we can offer really good prices and make just enough money to cover all our cost and just pocket a small amount of money off each trip, I think it would be ok. Unlike some agencies that charge alot to make more off each trip..its not about the money for us so I think thats where we will be ok. As long as we can cover the expenses and pocket some money we wil be happy. But ultimately, we wont know till we try I suppose

[doubleinfive]

Originally Posted by ftgokie

Thanks everyone for the input, its greatly appreciated.

Why do we want to do it? My wife has always wanted to be a travel agent, she loves to interact with people and she wants to make people happy. She wants to own a business to give her something to do and a way to meet new people...she is a huge people person and she could make friends with anyone..she just has that special something about her..kinda freaky

Me, I would like to own a business because it will keep her busy, she is strong willed and if she wants something, she will find a way to get it. We love to travel, so bacially we can travel a little cheaper I am guessing and we can see parts of the world and give people real advice as opposed to a travel agent thats never been anywhere telling you what you should and should not see.

When I travel, I am always going to out of the way places, off the beaten path, so I think we will be able to offer something unique to people around here on some ideas for some trips.

Basically, she said she wants to help people to travel and be her own boss. granted, the boss is ultimately the customer, but she has wanted this ever since I met her 18yrs ago and we just sat down one night and I said, if you want to do it, lets go for it.

Might not be the right answers on why i/we want to do this, but thats about as honest of an answer that I can give.

There's no right or wrong answer, only an honest one...and you've given it with conviction.

Keep your costs low, set reasonable goals and stick with them. Run your business as you have your personal finances and you'll be just fine.

Good luck, Shawn.

[ftgokie]

Originally Posted by doubleinfive

There's no right or wrong answer, only an honest one...and you've given it with conviction.

Keep your costs low, set reasonable goals and stick with them. Run your business as you have your personal finances and you'll be just fine.

Good luck, Shawn.

Thank you!

We have thought long and hard about it, with my uncle giving us a good price on the lease is definately gonna help. We honestly got into it so we coould let our friends and family save on trips, wasnt even in it for the money....so I think we will be fine.

[Tri-Tip]

The company I work for (a manufacturing company) opened a travel agency 10-12 years ago. We figured with about 100 employees each travelling 3-4 times per month for business, the commission and savings over a public agency would pay for the two employees. Whatever outside business we got was just gravy.

That was about 6 months before the airlines dropped paying travel agencies a 10% commission, and the hotels and car rental agencies quickly followed. They did make some money on pleasure trips, mainly cruises and resort packages, but it's an incredible hard business to have when you want to give personal service and try to make a buck.

[bayerische]

Originally Posted by gettocard

Opening a travel agency in an era were people log online for their travel needs is going to be a risky bet. I've seen a lot of travel agencies/offices shut down in my city for the past 10 years. Do a lot of research before doing this move,as I see it unless you sell some very ultra exotic products like Everest climbs or five star vacation it's tough to compete with names like Kayak. Best of luck,there is nothing like being your own boss

I haven't used a travel agency for about 10 years. Don't see myself doing it ever again. Everything and more is online, and people are getting better at using the online information.

I don't know how it is in the US, but over here there is only a few walk-in travel agencies left. And the ones who are left have joined forces in mergers. And at the moment this big company isn't doing too well. Since 2009 its turnover has declined by 18%. Profits down from 3,6 million Euros (2008) to 5 thousand! euros in 2011.

I don't want to discourage you and your wife, just be careful. Do some investigation into the market in your area, because the numbers in Finland are so bad for travel agencies, both brick and mortar and the online ones. Only a few are making real money.

[Monte Cristo]

I'm all for people following their dreams. My below advice is from experience and is generic to small business and not specific to travel, as I have no experience in this marketspace.

1. Most important, make sure you have good cashflow. Many a profitable business fail because of poor cash flow.
2. Treat it like a business and not a personal hobby. Set targets, goals, budgets, etc.
3. Make sure business dealings with "family" are discussed/agreed/documented upfront. (Just like you would with anyone else).
4. As suggested, if you can gain experience in another business first, that would be great.
5. Working in the business and working on the business are two different things, so make sure you do both.

Also think about who will run the business when both of you are travelling? Assuming you will be keeping overheads low initially by not having employees?

Good luck

[Kingair]

Originally Posted by Monte Cristo

I'm all for people following their dreams. My below advice is from experience and is generic to small business and not specific to travel, as I have no experience in this marketspace.

1. Most important, make sure you have good cashflow. Many a profitable business fail because of poor cash flow.
2. Treat it like a business and not a personal hobby. Set targets, goals, budgets, etc.
3. Make sure business dealings with "family" are discussed/agreed/documented upfront. (Just like you would with anyone else).
4. As suggested, if you can gain experience in another business first, that would be great.
5. Working in the business and working on the business are two different things, so make sure you do both.

Also think about who will run the business when both of you are travelling? Assuming you will be keeping overheads low initially by not having employees?

Good luck

B I N G O

Also you mentioned "if we can offer really good prices and make just enough money to cover all our cost and just pocket a small amount of money off each trip, I think it would be ok"

Make sure that a little is enough for all costs !

HAGOne

[figbo]

First,stop saying "we" and say "she or hers",might be a conflict of interest with VA,just my .

[Rbdport]

I use a travel agency for 90% of my travel. I'll book my own flight if I'm traveling to visit my folks in AZ, but other than that, I use an agent. I use American Express. As a cardholder, their services are dirt cheap ($50 for a trip booked over $3000- which these days is the cost of airfare). Travel companies have consolidated significantly over the last several years. You may have a tough time competing against a global company that charges $50 for their services. And with the travel industry, it's the contacts the agent has that can get you that something memorable/exciting that make paying for their services worth it. Your wife may be better off starting with a company, build up clients and unique contacts first and then step out on her own. I'm very loyal to my travel agent and would follow him anywhere.

[TheVTCGuy]

Shawn, I wish you the best of luck. I started and had my own side business for 10 years; never got rich off of it but made about an extra $15,000 a year or so. It was a lot of work, but because I was very comfortable with what I was doing it was not difficult to make it succesful. The pride I had from it was worth more then the actual revenue made. I earned a reputation among my clients as a proffesional that would always take care of them (guess I had em all fooled!). Anyway, I sold my business last year, again not for a lot of money but I am proud to say I started that thing from the ground up and handed off a good product to the buyer. Kinda cool...

[skipp2]

First of all, congratulations on your personal success. Sounds like you already know how to make good financial decisions.

something to consider...

Would your wife be willing to work for a travel agency for 6 months to a year? Not sure if this is possible because I don't know how far away the neighboring towns are but it could be a good way for her to experience the ins and outs of the business to see if it's something she truly wants to pursue. It's a great way to learn what works and more importantly what doesn't work in that industry.

[perpetualman88]

Most important advice for a small business owner. Take control of your overhead and minimize it to the absolute core without effecting quality

Also as tony said stay away from layaway it will be nothing but headaches in the long run

I would also consider the fact many people book vacations through the internet and how to give your customers an advantage booking through you rather than online.

Best of luck mate