What is the strength of your agency’s financial management? This is one of the four keys to determining the value of your travel agency – operations/resource management, market position/agency image, financial management and business history. I am addressing each issue in separate articles.*Let’s consider financial management strength today.Q: Do you operate under the accrual or cash method of accounting?A: If you’re on a cash system, ask your CPA to convert your books to accrual. If you prefer staying with cash accounting, be certain that your income is reflected properly so that a buyer will know what he is buying.Q: What is your net worth?A: This is probably one of the most important valuation criterion in establishing price.Q: Do you receive a monthly balance sheet and P&L?A: If you don’t, it will be difficult for a buyer to assess trends, growth and your overall financial management.Q: Have you kept track of key financial ratios in order to get an early warning of changes in your business, such as:o Sales per employee and/or customer and/or vendor?o Commissions as a percentage of sales?o Percentage of override commissions by vendor?o Percentage of return sales by customer or account?o Percentage pre-tax profit of commission revenues or sales?A: Very few agencies have a formal program that reviews the “quality” of their customers. I have seen a tendency to serve anyone just to get the business in the door. If you look at some of those ratios above, you might find out that the XYZ Corporation’s account that you finally landed is costing you more than you’re making on it. A buyer will be more impressed with strategic thinking along these lines than with a single number of sales.Q: How are you doing with your collections?o Are your accounts receivable properly aged?o What is your reserve for bad debt and actual write-offs for the past five years?o What is your collection mix of credit cards vs. invoice?o What do you do with un-collectables?o What credit analysis procedures do you have when taking on a new account?A: Again, these items are important and reflect on your abilities as a financial manager. Bear in mind that the buyer of your agency may not necessarily have the same business acumen you have, yet you obviously want him to succeed.Q: Do you have a formal annual budgeting process?A: This is a truly impressive feature to a buyer. Even if you haven’t performed to your budget, with proper variance explanations, nothing instills confidence like a well-thought out budget.Q: Do you have bank references readily available?A: If you have a positive cash flow and generated income from your surplus investments, your banker will say very nice things about you. If you’ve borrowed money to meet the occasional air report and repaid it promptly, your banker will also have nice things to say about you.The key feature in all the criteria above is feedback. It’s like driving a car – do you have full and properly calibrated instrumentation or are you driving with the dashboard painted over? I have seen agencies with outstanding “instrumentation” and I have seen others with even the wind shield painted over.If all you know is that you’re in the travel business but you’re not really sure of any of the ratios or data above, how do you expect a buyer to make an assessment as to what he should pay for your business?Your answers to these questions will help determine your agency’s net worth – and its value in the marketplace. Travel business consultants such as Travel Business CPR will review and prepare your operation for sale on your behalf.
Believe it or not, our life revolves around travel everyday! When we think of the word “travel,” we would normally think about exotic vacations, airplanes, road trips, our dream travel destinations, all inclusive hotels on a tropical island, you name it! Travelling is simply moving from point A to point B. This includes but not limited to travelling to work, travelling to school or even travelling to a destinations a few blocks away from our home.Humans and animals travel for various reasons. During the winter time, some birds such as the Canadian geese, travel south to far as Mexico to escape the cold (humans do that too!), we as humans travel to work in order to make ends meet and the list can go on forever. Not to mention, we travel to other places on this planet to temporarily escape our chaotic environments, then we come back to it rejuvenated. Sometimes we even travel permanently to other destinations for various reasons such as seeking a “better life,” reuniting with family and taking up a new job offer.Just about everyone has their own dream travel destination. Many people in developing countries dream about travelling to the USA to taste the American dream; many people from developed cold countries dream about travelling to tropical countries such as Jamaica to taste at least two weeks of sunshine and many others from various regions around the globe dream about exploring other countries that are known to have extraordinary sceneries.Now unfortunately, many of us don’t get a chance to fulfill our travel dreams in our life time for various reasons such as lack of finances, can’t get the time off from work or just simply having to fulfill other commitments. These common excuses mentioned here are all understandable; however, the truth is you can still fulfill your travel dreams if you work hard at it. The question I have for you is, “How important are these travel dreams to you?” If your dream travel destination doesn’t have any form of priority in your life, don’t expect to be going anywhere soon! Yes, I would certainly encourage you to be realistic with your finances and resources at the same time. If you really want to go on that trip that dreamed about all your life, make it happen!Start planning ahead with your family about the family travel plans. If you plan at least 1-2 years in advance, you can make it happen (depending on where you’re travelling). For example, if you’re planning an all inclusive trip to the Caribbean for a family of four, and save at least $200 US or more a month, you’ll be amaze to see how much you’ll end up by the end of the year!You may say “I can’t afford this” but think about all the unnecessary things that you’re purchasing and add up how much you can be saving and who knows, you and your family can be able to fulfill that travel dream in less than a year! By saving up from now, you can pay for that vacation with cash without going in to debt if you start saving now. Yes, it’s going to take some sacrifice but at the end of the day, it’s all worth it. It’s good to also plan ahead with your boss when you want to take time off from work. If you own your own business, plan ahead of time to set aside some days off from work.Did you know that there are some benefits about travelling? Education may be the first benefit. Yes, travelling can also be a learning experience. A person from a developed country who travels to a developing country may learn how to complain less and appreciate life more in his own developed country. A person from a developing country who travels to a developed country will learn that he can have a “better life” in another environment though this may not be true all the time.Travelling to other nations may give you the opportunity to discover developmental and business opportunities. If you’re an entrepreneur or investor who is on a vacation in another country, you may learn about some investment opportunities that may come with great rewards.Travelling may be good times to get know your friends and family much better. Not to mention again, it’s one of the best opportunities to relax and escape the stressful world for a while. I enjoy travelling myself and I also enjoy encourage people to travel other places, and even locally. My travelling experience has taught me that there is much more to life than I thought before. In other words, my view about life has changed for the better.Happy New Year to you! I hope that you, your family or friends, would be able to fulfill the travel dreams that you have in mind during this year. Remember, your travelling journey starts now by implementing the plans. All the best!
Are you one of those people who travel constantly? Improved fitness and well-being is very important especially if you are traveling on business. Traveling can have an effect on fitness. Sometimes when you arrive, you will be dehydrated, disoriented and unfit to have fun. Are there ways that you can stay fit even with traveling?Keeping fit while traveling is important, this can reduce stress and even increase productivity. So here are some ways that you can keep fit while traveling particularly if you are flying from east to west.One thing you can do is to book or reserve a daytime arrival. And once you arrive, you can go outside and start doing something dynamic in the daylight. This will help you recover from jetlag more quickly. This will also help you adjust to a new time zone as well. Keep in mind that jet lag is just a result of your body’s circadian rhythm being out of order. And natural light is a powerful cue for your internal clock to tell where you are and what schedule to keep.Another way you can keep fit is to have a bottle of water with you. Remember that the cabin is very dry and this will make you dehydrated. Having water with you helps you combat dehydration, which can cause fatigue. It is also better if you drink two eight-ounce glasses of water before you board. And then take one again each hour on every flight.While you are on the plane, try to walk the span of the plane on every hour. This will help keep your back comfy and your muscles pliant. This will also help keep your blood circulating. You can also try booking a seat near the emergency exit when you are not traveling business or first class. This way you can have a roomier seat and will even give you more leg room.And once you arrive at your destination, it is recommended that you withhold the hotel clock. This will guarantee that you will not sleep on your remaining 3 hours if you need to wake up at six o clock and you know that it’s already three in the morning.In addition, if you are constantly traveling, try to keep your fitness level by exercising at least on every third day while you are traveling. If you are following a fitness program, perform at least a third of your aerobic schedule at your usual level of intensity.