Travel Agency Worth – Continued #2 of 4 (Market Position & Agency Image)

There are four critical areas to consider when determining the worth of your travel agency:o operations/resource management,
o market position/agency image,
o financial management, and
o business history.Today my topic is Market Position & Agency Image.Q: How do you manage your business relationships?
A: A potential buyer will and should check on your sales efforts, service levels and client relations skills. If much of the business is retained because of you (i.e., a country club relationship), you have very little to sell. On the other hand, if your key accounts are under contract or letter of agreement, then you have a tangible asset.Q: What would your ex-employees say about you?
A: An astute buyer will certainly contact some of your ex-employees and learn more about your operation in half an hour than during two days in your office. If you had turnovers because of retirements, transfers, pregnancies or similar reasons, you’ll be okay. If your turnover stems from non-competitive salaries, poor working conditions, dissatisfied customers or similar reasons, then the operation you’re trying to sell is not as desirable.Q: What about your competitors?
A: Inevitably, if an individual or company wants to buy your agency and if an agreement cannot be reached with you, the alternative is to buy another agency. In all likelihood your potential buyer will have already spoken to the competition and checked on you from that side.
Bear in mind that in a sales situation, the competition also comes from those with a business similar to yours who might be willing to sell for less. However, if you’re in an area where you have little or no competition, one alternative for a potential buyer is take a fraction of the money required to purchase your established operation, set up shop across the street and compete with you from the ground up.Q: What would your vendors, i.e., airlines, hotels or car rental companies, say about you?
A: Most proprietors I have met fully recognize the value of a good relationship with their vendors, but in some cases I have seen egos so big that they can barely fit through a door. In that case it may be an uphill battle for a new owner to re-establish relationships that you neglected.The overriding concern in all of the above criteria is professionalism. If you:o have customers who really appreciate the service your company has been giving them,
o have low turnover because your employees truly enjoy their work environment,
o are respected by your competition, and
o can get services from your vendors that no other agency in your area has access to – then you have an asset worth paying for.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.