Anne Cutaiar, CTC
So you have decided you want to be in the travel business. What next? Maybe you have traveled for many years and have always been the person that coordinated travel for your friends and family? Maybe you are currently working in the world of travel and would like to branch out on your own?
Either way you will find as you enter this new and exciting career that there are many decisions that need to be made to be successful with your business.
This paper focuses on those that have made the decision to be a self-employed independent contractor (IC) and many of the considerations and decisions that need to be made as you begin your new venture.
This is not all-inclusive but can be used as a guide to new independent contractors. The topics have been organized in 4 categories: In the Beginning, Business Practices, Travel and Training, and Marketing, Branding and Networking.
IN THE BEGINNING
Name your business – After you decide on a name for your business, if you are a sole proprietor you will need to visit the County Clerk to file a dba (doing business as) certificate. The clerks at the office will guide you through the search process as you make sure no one else is using that name or something close. You can then lock that business name in for yourself. If you choose a different business entity other than a sole proprietor, your attorney can guide you through the naming process.
Choose a host agency – What is a host? According to www.hometravelagency.com, “most home-based travel agents work with at least one ‘host agency.’ Host agencies are bonded, accredited ARC/IATAN agencies through which the home-based agent makes bookings. … The home-based travel agent is an independent contractor, a separate business, just like the host agency.”
What is the benefit of having a host company? Although there are many, some common reasons that travel professionals affiliate with a host are: it is less expensive than being on one’s own, training is offered from experienced professionals, supplier relationships are shared, better commissions are paid, fraud avoidance is taught and sales and service support through the booking process is given.
It is very important to choose a respected host. This choice can be critical to your future success. There are a number of resources you can review as you decide. The Travel Institute has a list of affiliated host travel companies on their site, www.thetravelinstitute.com, and links directly to each of the hosts themselves so you can review the companies and see what they each offer. Another avenue is www.hostagencyreviews.com that gives information regarding each company’s background and affiliations.
What questions do you ask? This will depend on what host agency attributes are most important to you. Questions you might ask are the following:
Who are they affiliated with? What type of training program do they offer? How much does it cost? How much do they pay? What are other agents saying? What does the professional world say? How long have they been in business? How much experience do they have managing other independent contractors? Do they offer sales leads and if yes, is this important to you? Do they sell to your clients and compete for their business or do your clients belong to you? Do they provide you with a website?
Many of these questions could be important to you and how you want to run your business. Finding a host that matches your style and business goals can be valuable to your business.
It is also important to not choose the wrong host. Some hosts offer what appear to be get rich quick opportunities, immediate travel credentials and free trips. Be wary of anything that appears to be too good to be true. It generally is and if you research further you can determine if the company is respected within the travel industry. If it isn’t, then you will not want to be tied to it. This is your reputation too.
Getting your domain, email address
Email – There are several email providers that you can choose. Genesis and Go Daddy are two popular ones. Although you can set up a business email address through yahoo or gmail it is much more professional to have an address such as john@mybusiness.com. Providers can also offer you an opportunity to have additional email addresses tied to your company, for example you might have one email address that you use for suppliers and promotional offers they send you and a second email used strictly for dealing with clients. Doing it this way can reduce the chances of you missing an important client email in the midst of supplier emails. And every client email is important.
Domain – The provider you choose for your email can also supply you with a domain name such as www.mybusiness.com. Having your own domain name is important since it is another way of keeping your business name in front of clients. The domain provider can provide a number of other services that you may decide to utilize with your business.
BUSINESS PRACTICES
Part time or Full time – This is a big consideration. Even if you have been the travel planner for your friends and family for years, earning self-sustaining income is another story. Since it can take a couple of years at least, for any new business to ramp up, you may decide to keep your full time job as you venture into the business. Or possibly your significant other has sufficient income to allow you to start out full time and give you the necessary time for you to build your business to the income level you seek.
Business entity – Should you be a sole proprietor, partnership or LLC? Seek an attorney and accountant in your area and review the pros and cons of each to decide which might be best for your business. Can you use your social security number for the business or will you need an employer identification number? This depends on the business entity you choose, and the professionals can guide you.
Accountant – Choose an accountant. If you have other self-employed friends or associates they may be able to refer you to someone knowledgeable, experienced, and reliable. You will want to understand more about what expenses may or may not be deductible when you file your taxes. It is a good idea to have a professional assist with your IRS and state tax filing, so that they are completed correctly. Having an accountant will help you avoid IRS pitfalls and it will give you peace of mind to have a professional in your corner should you be selected for an IRS audit.
Plan for taxes – As an IC, no taxes will be taken out of your commissions earned. You will receive a 1099 at the end of the year and owe taxes on the amount earned. This is where good records such as expense tracking and a good accountant for IRS compliance are important.
Bank account – You will need a separate bank account for your business. The documentation needed by the bank will depend on the business entity you choose for your business. The bank will also need a tax identification number which can be your social security number or an employer identification number (EIN) depending on your business entity, ie: sole proprietor, partnership, LLC, etc. Although one can apply for the EIN online it is always a good idea to get advice from a professional first, to make sure you have chosen the type of business entity that is right for you.
Shopping for a bank – As a former banker for 36 years, I can tell you that different banks offer different account options and requirements. Shop around. Find a banker that asks a lot of questions about your business, takes an interest and offers advice – someone that is interested in building a relationship with you and your business. A good branch system, technology and product set are very important, as well. Find a bank and banker that fits well with your needs and potential future plans.
Seminars – Many banks will partner with the Chamber and other organizations to offer business seminars. Many have online programs available as well as bankers that focus solely on small business clients. Generally, these seminars are open to both clients and non-clients of the bank.
Credit card – You should have a separate credit card for your business expenses. This makes it cleaner when claiming deductions on your taxes, should you be audited. If possible, apply for one in the business name. At the very least, get a separate one in your personal name to start.
Small Business Development Center (SBDC) – Visit the SBDC or similar entity in your state and speak to a business advisor. This is a free service for both new and established businesses. Advisors can walk you through setting up your business plan, projecting revenue, setting up your budget and much more. If you are thinking of a bank loan for your new business this will be a very important step that you should take early in the process. The SBDC can assist you with deciding how much money you will need to start your business, decide if you want to self-fund or need to borrow, or if borrowing at the outset is even an option. For more information on what they do in New York State, for example, you can refer to their website at www.nyssbdc.org.
Organize your home office – As you progress through your training and begin selling you will find that this is very important. You will need electronic and/or paper files for commission tracking, some type of calendar for tracking deadlines such as client payment due dates, client files with appropriate notes as to where you are in the planning process, and general travel resources and training files and expense tracking. You will need a client relationship management tool (CRM) that is often available with your host company that will aid you in keeping track of client and prospect personal data.
Your office should be in a separate room away from daily distractions. Having set hours will also allow you to be more focused when working and build in down time which is very important to staying fresh and enjoying family time.
Set Goals – Write them down. What do you want to accomplish the first month, the first 3 months, the first year? Make a list of anticipated expenses. How much revenue will you need to produce to cover the expenses? Set a personal timeline, be methodical in your approach and review your progress at regular intervals.
This will be a guide and can change as you move through the process. Your host, peer agents and business advisors can help advise and guide you through the process.
E & O Insurance – This is Errors and Omissions Insurance that can help protect your assets if you make a travel booking mistake and the client sues. You will want to find out if you are covered under your host agency’s policy. It may not cover all situations so many agents opt to get their own policy.
Seller of travel laws can be different from state to state. Your host can guide you with information on this but there are also many resources. One resource is www.travellaw.com that says “of these states, there are currently six states which require registration as a seller of travel regardless of where the agency is located: California, Florida, Hawaii, Iowa, Nevada, and Washington. Some states such as Oregon, Ohio, and Texas have implemented, then repealed their seller of travel registration programs.” Check your state’s seller of travel laws. This is ultimately your responsibility, not your host’s.
TRAVEL AND TRAINING
To Specialize or Not – Having a Niche – Many agents will decide on a certain niche they have an interest in and want to focus on. Specializing can lead to a good following if you do it well. If you have a specialty or narrower focus, it can also help you become less overwhelmed with all the travel information out there. If you prefer to be a generalist, then choose 1 – 3 areas of focus to start. Once you get good at these, you can add to it based on the needs of your clients and the areas of focus that interest you. The Travel Institute offers many destination training programs at www.thetravelinstitute.com/specialization/destination-specialist that can help get you started.
Qualifying a client – What does that mean? Many times when one moves from a “family and friend travel planner” to a business entity an expanded knowledge of the importance of qualifying clients comes in to play. Not always, but often, family and friends may rely on you for internet searches that produce inexpensive vacations. Although price is very important to many and can’t be ignored, finding the right fit for a client becomes equally important. For example do they want a family, couples or adult only vacation? Do they want action or quiet? What is their budget, their desired spending price range? How old are they? Where have they traveled previously that they liked or did not like? Asking questions to understand the clients’ needs are key to providing them with the vacation they are seeking.
FAM – This is a familiarization trip that is offered by suppliers that allow you to experience their products so that you can better sell them. They will generally offer this to agents either on a first come first served basis or to agents that have already sold their product. This is not a vacation. It is focused learning opportunity that is usually offered at non-peak travel times.
Suppliers and Cruise Lines – All offer their own training programs. If there are certain suppliers that you want to learn more about or focus on, all if this information is available and free for you, once you are affiliated with your host agency. Many of the trainings are offered as webinars and self-studies so it can be done from the convenience of your home office.
Conferences – There are many travel conference opportunities. If you are starting out, you may not have the funds or time to attend all, so it is important to review the options and prioritize. Attending the annual conference offered by your host should be a top priority, since this will allow you to meet and build relationships with the host company and their preferred suppliers.
Travel Institute – Travel credentials and certifications are very important and show that you are a serious professional. A number of training and certification programs are offered by The Travel Institute at www.thetravelinstitute.com that will provide you with invaluable knowledge about the travel industry as you embark on this career path.
Cruise Lines International Association (CLIA) – Whether or not cruising becomes a niche for you, you will find that many clients love this type of vacation. CLIA offers cruise certification programs that can aid you in marketing and selling cruises and offers invaluable information on many cruise lines. Information regarding their certification programs can be found at www.cruising.org. They also have an annual conference “Cruise 3sixty” that offers extensive cruise product training and ship inspections.
International Air Transport Association (IATA) – As per www.iatan.org, “IATAN has been servicing all facets of the US Travel & Tourism Industry for over 20 years. Its globally recognized Accreditation Program offers US Travel Professionals worldwide recognition of their business, which no other accreditation program can.” To earn IATA recognition, there is a minimum commission earnings requirement. Having this designation can be valuable when working with suppliers and when you want to experience their products so that you can better sell them. More information regarding the credentials and benefits can be found at this site and at www.iata.org.
Online articles and magazines – You will find many resources and travel topics galore both in magazines and online. Keeping up-to-date on current events in the travel industry is important and although there are many, one good resource is Travel Weekly that has industry news, resources and much more. Further information can be found at www.travelweekly.com and their Facebook page.
MARKETING, BRANDING AND NETWORKING
A good host can guide you through the marketing process. That is why you have them – for marketing and training support, as well as supplier relationships and better commission. As much as you are invested with them, they are invested with you. They want you to be successful. The more money you make, the more money they make.
Company logo – This will help brand your company. You can have a local marketing company do this or you can go online with VistaPrint at www.vistaprint.com, for example.
Tag Line – Develop a tag line. This is a good branding tool and helps clients remember you and ties the experience they are seeking to the experience you are selling. Lake Champlain Travel uses “Going places, making memories” for example. Another example is The Travel Institutes’, “over 50 years of educational excellence.”
Mission Statement – Create a mission statement that speaks to who you are what you will do for your clients. This defines you in a quick, short expression and is another important branding tool.
Agency brochure – This is another branding tool that can be left at the Chamber and other businesses that agree. It tells about who you are, what you do and can also include client testimonials. There are many resources that can guide you through the creation of this such as your host agency or a local marketing firm. You can also use an online resource such as VistaPrint found at www.vistaprint.com.
Business cards – You can also purchase these locally or online and should have your business name, personal name, title, website, contact information and company logo. Some agents also put their photograph on them for more recognition.
Prospect list – Develop a target list of 250 people you know or know of that you want to build relationships with and could be potential future clients.
Intro letter – Develop a letter of introduction for yourself to mail to the 250 prospects letting them know you are now in the business of travel and what you bring to the table for them.
Press release – Your host agency can help you develop this so that you can also let your local community know you are now in the travel business.
There are many potential networking groups that you can join that will help you build relationships, ask for referrals and promote your business. There are many more than are listed here but a few ideas follow.
Friends, family, clients
Chamber of Commerce – The Chamber offers many training programs and networking opportunities. Look into the cost and benefits of joining your local Chamber. This is generally not free but the business training, information and networking opportunities can be invaluable.
Business Networking International (BNI) – This is a group that allows only one person from each profession to join, for example: 1 banker, 1 realtor, 1 travel agent. You can either join or start a chapter in your area. The idea is that you will learn about each other’s business and refer mutual clients to each other. There is an annual fee with this organization and more information can be found at www.bni.com.
Service clubs – Rotary, Kiwanis, Lions to name a few are good networking sources.
Meetup – Defined by Apple, “Meetup brings people together in thousands of cities to do more of what they want to do in life. It is organized around one simple idea: when we get together and do the things that matter to us, we’re at our best. And that’s what Meetup does. It brings people together to do, explore, teach and learn.” An idea would be to start a meetup group in your area that focuses on travel to build your client base. More information on this can be found at www.meetup.com.
Social Media – once you have set up your company and are affiliated with a host there are many Facebook closed groups for travel agents on many topics. Your host may also have one. These groups are invaluable for getting practical answers from other experienced agents as you venture out. You can also answer questions for others that may come up in your area of expertise and this can be very rewarding. Twitter, Instagram, Linked In and Pinterest are also avenues. Each may be better for a different audience, have different posting rules as far as timing and content. So that you don’t overwhelm yourself at first, start with one or two.
In summary, the start-up phase, business, training, and marketing are all critical to the success of your business. Some need immediate implementation and others can be integrated over time. There is a wealth of information and resources for each topic. Your host agency can be instrumental as you work through the business phases.
The key is to try not to become overwhelmed. Make a plan, target completion dates and methodically work through the process. You will get there. This is a very exciting time and a very exciting business. If you love to travel, learn about travel and want to make money doing it, you are on the right track!
