When you start a travel agency – whether it’s from home or in an office space, it’s normal to expect that there is a time delay between starting the business and making money … enough money to support yourself. But at some point, you should be making money. And not just a little. Enough to pay yourself a salary that supports you. Enough to cover ALL of your expenses. Enough to pay salaries of the people that work for you.
Here comes a truth bomb: If you are not making enough money to pay yourself a satisfying salary and cover your business expenses (including the salaries of those that work for you), you don’t have a business. You have a hobby. It might feel like a business given the amount of time and effort you spend in it. You might have full intentions of creating a business, not a hobby. But the black and white indicator is your bottom line. And that’s why I call it an “accidental hobby.”
So I ask you, as delicately as possible…Do you have a business or a hobby?
I’ll be honest with you. I had a hobby for 6 or 7 years. So if your answer to yourself is hobby, it’s OK. You are certainly not alone. But if you want to pay yourself a satisfying salary, work with GREAT clients, and operate a thriving business, the place to start is with your mindset.
It’s possible all right. At GIFTE, we encounter hundreds, if not thousands, of travel businesses a year and there are people make fantastic money. And so many things are in your favor right now. There’s never been a better time to make great money selling travel.
The common denominator amongst those that are enjoying the ride of running a successful and thriving business is having the right mindset. But what does that really mean?
I can answer that question with 1 word: Focus
Here are 3 ways you can apply focus to your business to see a dramatic change in results.
1. Focus on your numbers (and take your head out of the sand).
It doesn’t take a brain scientist to realize that an average commission of $250 per booking is not a great return on your investment of time and energy. If you want to get to $100,000 per year in commissions, and your average commission per booking is $250, then you will need to book 33 trips per month, or just over 8 per week.
That might be doable for an online booking engine, or an agency with multiple agents, but NOT doable for 1 individual. Human beings are not computers and that’s a huge amount to handle for one travel advisor. So, get focused on your numbers so you can have clarity in your direction.
Here are some ways to get focused on your numbers:
A.) Reverse engineer your revenue and sales goals by starting with your expenses. Estimate how much you will spend in a 12 month period to run your business. Put every single item in your estimate….including the pencils and erasers. Put your travel expenses in there. Put your internet and phone expenses in there. Put your coaching fees in there. Put your professional expenses in there. Single. Item. Then, once you have a total, add your annual salary to it. And don’t fudge on your salary. It is not sustainable to underpay yourself forever and ever. Be realistic but be fair too. Pay yourself enough that you will WANT to continue working.
Once you have totaled your expenses with your salary, you now have a revenue goal. The sum of the 2 IS your revenue goal. By revenue, I mean the total amount of commissions you will collect and deposit into your business’ bank account, plus all service fees you charge and collect and deposit into your bank account, plus anything else that generates a check or deposit into your bank account.
Now that you have a revenue goal, you can extract a sales goal with simple math. For example, let’s say your revenue goal is $150,000. If you believe all of your revenue will come from commissions, (i.e., you are not charging service fees) and you receive 100% of your commissions from your host agency and your average commission is 10%, your sales goal will be $1,500,000 ($150,000/100% = $150,000/10% = $1,500,000).
B.) Know your numbers and TRACK them! Here are some critical numbers you should be tracking:
- Average Commission Per Booking
- # of Bookings Per Month
- Total revenues per month
- Total expenses per month
C.) Establish boundaries around what business you will work on and what business you will turn away. For example, several years ago, I decided I would no longer work for clients spending less than $5,000 on their travel. The easy way to turn away business, when I knew they were spending less, was to tell them that I had a $350 service fee and that I would be happy to help, but if their budget was a big priority, maybe this time wasn’t the time for them to use my services. I always referred them to some great online sources where they could get started planning it themselves.
2. Focus on an expertise.
I feel like a broken record here, but I will put it out there again. One of the most common paths to going broke in the travel business is the generalist route.
Today, focus on being an expert at something. Just claim it. Your expertise does NOT have to be a destination. Pick a segment of the population you want to serve and pick one problem you can solve or one dream you can deliver and get known for it.You don’t need to wait for someone to give you a certificate that says you are an expert at XXXX. Just claim it.
3. Focus on WHAT and WHY, instead of HOW and WHEN.
Focusing on how and when is probably one of the biggest blocks to realizing your success. Why? Because it these 2 questions come riddled with resistance. We are such an action oriented species that we feel we need to take action to get results. So you set a goal and it freaks you out a little. Your immediate thought is, “how will I ever get there?” Or maybe you keep asking the question of yourself, “when will I ever sell a Crystal Cruise?”
Imagine your dream to build a successful, thriving travel business is represented by a beach ball in a swimming pool. When you ask the question “how?” or “when?” it’s like pulling the beach ball under the water. As soon as you release the resistance, the beach ball pops to the surface. The same is true of your dream or desire. When you stop doing the thing you are doing that causes resistance … asking How or When … your desire will pop to the surface and manifest. It is not your job to figure out the how. That will come to you when you feel your way to an inspired place.
Make a commitment today to focus on your numbers, establish goals and track. Then go claim your expertise and get out there. Last, be willing to spend time each day focusing on What you want for your business; and Why you want it. How will it make you feel when you realize your greatest desires? Let yourself live a little. And most important, stop taking yourself so seriously!!!