Have you ever wondered how much your business is worth? I mean, if you had to sell it tomorrow, how much would someone pay for it. In all likelihood the answer is zero, nada! But it’s probably not for the reasons you might think.
Most travel agencies are what are known as ‘Key-Man” businesses. Much like with a realtor or hairdresser, the client tends to be loyal to the person, not the business. It is not unusual for a stylist to switch shops or a realtor to switch brokers multiple times in their careers. Where they go, so too goes their revenue. In the case of a travel agency, many clients, loyal to the owner, will disappear, thus the value of the business is a fraction of the purchase price. Therefore, most agency sales involve an “earn out.” The higher the retention, the more the seller is paid. Conversely, if business decreases, so does the purchase price. If you have a small homebased agency, you and your business are one in the same. For this reason, to a prospective buyer, the business probably has little or no value.
Assuming your goal is to create a self-sustaining business that provides you with income, so you can enjoy a certain lifestyle, or your exit strategy is to build and sell, you need to start putting procedures in place to scale your company. Which brings us to the final stage of the SA-6 (Sales Acceleration) Framework – “Growth”.
In his best-selling book, The Millionaire Real Estate Agent, Gary Keller writes, “Most (real estate) agents believe their clients will only do business with them. The reality is, your clients will work with whom you assign – provided they maintain or exceed the same level of service they would have received from the agent.”
In other words, as an owner, you must give up some control and put trust in your systems to grow the business. You set the standards and have hired for the roles to meet or exceeds expectations.
As owners and managers, you wear many hats, from CEO to Chief Toilet Cleaner. The key to growth is scalability and when you scale, you start handing off the hats (and the responsibilities that go with them) to roles you create. Notice I did not say hand off to “people” (more on that later).
Today, most restaurants tend to be franchises. There are many reasons, but the biggest is the need for consistency in product and service. When you see a McDonalds, you know exactly what you are getting. The process of creating a McDonalds hamburger is the same all over the world. The fries cook for exactly 3 minutes at 335 degrees F whether you are in London or Los Angeles. They have processes for everything so that the meal you have in Sydney is the same as in Syracuse.
The ability to grow and scale your business is dependent on three things: Process, Systems, and People.
- Process: It is vital to document how you do everything down to the finest detail. From booking via telephone and online to payment processes, prospecting, marketing, and sales processes – everything. It is perfectly acceptable to emulate those who do things well. If you remember the movie, Coming to America, Eddie Murphy’s character worked in a fast food joint called McDowds. “We have the Big Mick, they have the Big Mac.” The important thing is to implement the processes you have documented so you are constantly fine tuning them for efficiency.
- Systems: Systems tie all the processes together. Once you have all your processes, you need to determine what tools and systems you will need to repeatedly execute them. For example, to execute prospecting and marketing processes, a good CRM is required. Bookings require a reservations system. Accounting requires QuickBooks or some other system that your CPA recommends.
- People: This is the variable. I like to use the cruise ship itinerary analogy. The ships (people) change and reposition, but the ports (roles) remain constant. Once you have the processes and systems in place, you can assign them to roles. A travel agent is responsible for executing prospecting and sales processes, staff accountant has the bookkeeping processes, etc. It has been estimated that 1 out of every 8 workers in the US have held a job at McDonalds. This means a lot of people have come and left the company. But that’s okay because they hired for roles, not built the role round a single person. The have perfected the system so that anyone can do the job provided they follow the steps in the processes.
Travel agents and other staff will come and go, but if you hire for the roles and are consistent with your service, maintain high standards, and hold everyone, including yourself accountable to the systems and processes, you will be able to scale your company.
Scaling your business with systems and processes will allow you to meet demand without sacrificing the quality, trust, or reputation you built as a “one-man shop”. It will have real value because your presence is not needed for daily operation.
You can either sell it, or take that World Cruise you always dreamed about and enjoy the lifestyle.
The final installment in this series will show you how every step of the SA-6 Framework works together in a repetitive cycle to help you build a sustainable business.
Dan Chappelle helps travel sales professionals achieve full potential by transforming their mindset and focusing on fundamentals to produce real results. He speaks internationally on strategic business development in the travel & tourism vertical. His signature keynote & workshop “Secrets of Selling to the Affluent Traveler” helps organizations, entrepreneurs, sales professionals, employees, and business owners gain meaningful competitive advantage.
His new book “Get Your S.H.I.P Together – The Wealthy Travel Agent Guide to Sales” is now available on Amazon.com in both paperback and Kindle versions. For information on Dan’s education and sales programs, visit www.WealthyTravelAgent.com
For information on Dan’s Sales Acceleration programs, visit: www.DanChappelle.com