Without a doubt, the most read, shares, and commented columns that I have written center on the down and dirty advice. You know the type–what to do when this happens. I have written for consumers and trade alike and they always draw the most attention. To be honest, they are some of the easiest to write. After all we all work in an industry that has no shortage of tales, snafus and screw-ups. I can usually draw on a past experience to create the topic; but then I thought–what if I drop dead?
I have nothing to go on there. It is a pretty melodramatic question, but a valid one nonetheless. Let’s face it, no one is getting any younger. The industry as a whole is, shall we say…maturing. And since 2001, we have seen more consolidation in the industry resulting in many professionals being solo practitioners working from home offices. Certainly this is a little more complex than a missed connection in Atlanta or a lost Passport.
We have built our practices based on the level of service we provide, and as morbid as it sounds, we need to continue that service even after we die. And in talking to many agents, most do not realize that this business (profitable or not) is an asset in your estate.
Succession is not too dissimilar from a sale or merger—it is just more immediate and pressing. So how, exactly, do you handle this? I spoke with Bob Sweeney from Innovative Travel Acquisitions to get his opinion.
Have a plan in place to immediately turn your business over to a trusted agency. Pre-execute an agreement that allows them complete access to your client files and records—not financial records. This turnover agreement will include transferring the phones and mail, and compensation for the successor agency for all commissions and fees received for a finite period.
Bob suggested that 15% of the commissions and fees earned for a period not to exceed two years would be reasonable. I imagine a non-solicit agreement would be a benefit as well.
And his second suggestion was very practical as well.
Your customer list has value and in the event of your death, it is up to your estate to get as much value for it as possible. Rather than just letting the agency close, or slide over to your trusted agency partner, make sure your will includes instructions to immediately contact a travel attorney for advice and perhaps a travel business broker to facilitate a sale. Travel agencies are sometimes complex and difficult to value. A professional in the field is well worth the cost.
I might take it a step further. Might it make sense to pre-sell your agency to your trusted agency? You could craft a contract that gives them the first right to purchase and the terms could be pre-set. But I would caution to make sure they are reviewed annually as the marketplace is changing and we have all heard about the dead guy who never updated his will and his estate goes to an unintended recipient.
It’s just some food for thought.
As travel professionals, we try to make sure everything goes off without a hitch for our clients. If we are still around, it is testament that we are succeeding. Don’t let a little thing like death get in the way.