Continuing on my list of resolutions inspired by Travel Pulse, this week, it’s all about the money. If you are the US Bureau of Engraving, making money is a piece of cake—fire up the presses and run off a few million. If you are a small business, unfortunately, it is not that easy! But, it may not be as difficult as you think!
I think I speak for every single travel professional in the world when I say “I wish we made more money.” More money allows you to grow the business, to have a less stressful personal life, afford some niceties, attract and pay for better talent, give back to your community, etc. The list is long. But the reality is that we need to put food on our plates with the money we do earn. So, if you are content with Ramen noodles—stop here. If you might want to eat a hunk of filet mignon every now and then–read on.
Making more money is not that hard when you break it down. There are aspects of your business that you should review every year when you refresh your business plans that can save and make you money. Here are some of my top ways.
Fire your clients. Not all of them. Just the unprofitable ones. You know who they are. They waste your time and either end up buying it cheaper someplace else or buy the entry-level product with a discount code from a vendor. Get rid of them. The time you waste on them can be spent more effectively working with clients that appreciate your expertise, or figuring out how to attract clients that appreciate your expertise. Look into your back office system and figure out how much time and money you spend per booking, and then take a look at the bottom 100 lowest commissions of your year. That will get you on your way!
Fire your suppliers. Again, not all of them. But seriously focus on the suppliers that want to partner with you. Why would you sell Supplier A for a 10% commission when Supplier B will pay you 15%? Join a consortium or franchise and figure it out. Let the client guide the destination and travel type—your job is to guide the supplier selection. A week in the Caribbean is a pretty standard offering across many suppliers. Same hotels, same amenities, etc. Just because a client comes in with a Supplier A promotion, does not mean he needs to leave with a Supplier A promotion. Remember…YOU are the expert.
Look at expenses. This is a no brainer. The less you have to spend on operating your business, the more you will earn. Where can expenses be cut? Look to your advertising and marketing. Never advertise somewhere because “that’s what we’ve always done.” Look at all of your advertising and figure out what is bringing in the business. An ad in the local paper may look nice, but if it isn’t making clients come to you, you just wasted your money. Renegotiate a GDS if you have one. The commercial rental market has changed, you may be able to save a few dollars there! Using Fedex? Look to the post office or UPS.
Look at efficiencies. There is usually a way to do a task quicker or better. Seek them out. Ask your colleagues how they do things. If you abhor administrative details, can you hire a virtual assistant? Hack away at graphic design? Go to Fiverr.com and hire someone to do a year’s worth of graphics for your site in one fell swoop. I have a company managing my IT for me and my contract is $100 per month. I know I would blow through a year of their cost in one outage if I tried to fix it myself. Can you share resources with a friendly competitor or another local business? All of these can save you big bucks.
Be creative and look. Look deeply and there are ways to save a ton of money and in the same breath make a lot more. Focus on the good—the good suppliers, the good customers, the part of the business that you are good at working, the initiatives that give you a good return. Before you know it, you’ll be in the next tax bracket.
Got any suggestions? Leave a comment!
Next week? Getting more travel experience!