Starting Your Travel Agency, Part One 

This is the second in a three-part series in launching a travel business.  Last week, we discussed creating a plan and setting goals for your business. For the next two weeks, we will focus on some fundamentals of starting your own travel business. And when we discover relevant articles in trade and consumer publications that can assist you, we pass them along to you. We’d like to share a recent story from Small Business TRENDS, How to Start a Travel Agency. We particularly liked Tip #1: Complete Relevant Training Colleges and business schools offer associate and four-year degrees in tourism. There are some independent educators, such as The Travel Institute, which offer certifications. All these studies will include courses in business management, marketing, accounting, and customer service. As part of ongoing education, you should also keep tabs on international affairs and weather events. In addition to sales, service, marketing, and destination training, The Travel Institute also provides a step-by-step checklist of actions you should take to jump-start your successful journey of starting your travel business: Launching a Travel Business: The Entrepreneur’s Checklist. This dynamic course contains dozens of worksheets, action steps, activities, and practical tips from travel professionals and peers and is designed to guide you through this segment of your career. Here are nine of the many tips recommended in The Entrepreneur’s Checklist, Part One: Setting Up Your Business:

• Choose a Business Structure. If you are an Independent Contractor, you must determine how your business will be structured. You can find forms for structuring your business online (LegalZoom.com; forms.findlaw.com, etc.), but be sure the forms are valid in your state.
• Plan for Your Taxes. Income taxes are not withheld from commissions and must be reported. Obtain a federal tax ID number.
• Find a Travel Host Agency. Interview potential travel host agencies to see which is the best fit for you.
• Keep Meticulous Accounting/Banking Records. Open a separate bank account and get a separate credit card for your business to keep its records separate from your personal records. Track sales, commissions, etc. with off-the-shelf software, like Quickbooks, or look at industry-specific customer relationship management (CRM) software. Strongly consider hiring an accountant to help you.
• Decide Whether to Charge Service Fees. Agencies derive the bulk of their income from commissions, but many also assess fees for transactions. Part of the preparation process is an examination of expected revenue sources, including whether to charge service fees.
• Research Licensing Requirements. Look up local and state laws for your business and ask your host what is covered by your affiliation with it.
• Research Travel Sellers Laws. Check your Seller of Travel laws, if any, to understand your responsibility versus your host’s responsibility regarding permits and licenses.
• Look into Obtaining Errors & Omissions Insurance. Ask your host whether it has E&O insurance to cover you or if you must get your own.
• Have a Back-up Plan. Develop a backup plan should you be unavailable or unable to take care of your clients’ requests.

And this is just the beginning! In Launching a Travel Business: The Entrepreneur’s Checklist, there are many detailed tips and steps recommended to ensure you are on course to succeed. As you can see, starting a travel business requires many components, including learning how to sell travel. Be sure to watch for next week’s Part Two: Starting the Consultative Process. Self -check time! How many of these steps have YOU completed?