Starting a new travel agency can be rewarding and fun, but be sure to stay in control when it comes to your finances. If you started a new travel agency at home or online, having your own business can be empowering. It can also be easy to lose track of your costs and expenses, especially as your client base grows. So take a few moments to plan and make sure that you set up your accounts properly at the outset.
Set Up Two Bank Accounts
According to New Century Financial (www.newcenturyfinancial.com), the first thing you should do when setting up a travel agency business is to set up two bank accounts. Why? One of these accounts should be for incoming purchases from customers. It should remain generally untouched until it’s time to purchase tickets or accommodations. The other is an account for company income and outlay. By separating these two accounts at the outset and moving money accordingly, you’ll have a solid accounting record to work with when it comes to everything from taxes to profit calculations.
Review Your Merchant Processing
Depending on the type of travel agency you set up, you will have to set up a way for clients to pay you. In today’s economy, all-cash payments are unlikely, which means you will have to set up merchant processing. There are a wide variety of companies providing this sort of support and all of them have some sort of fee structure. Reviewing this fee structure can be a boon to your business, and evaluating it in light of what your processing company can do for you is helpful. This is an area you should look at when reviewing your operating costs.
A Business Plan Can Help You Raise Capital
It’s not just for business school; having a well-written business plan can help you if you are searching for investors for your new travel agency. Having one written out is almost a requirement when trying to build a round of financing, so when you are ready for that sort of growth, make sure to have a well-written business plan available for potential investors. There are a variety of model plans available online, but it’s important to make sure that your plan isn’t overly generic. Chron lists writing a business plan as the first thing any new travel agency should have done.
Have Access to Capital Through Financing Your Accounts Receivable
Often new businesses have capital needs that they can’t get through typical means. New businesses may have trouble raising a round of capital investment, whether through lack of experience or connections. Banks are making it tougher than ever for new businesses to gain access to capital. So many small businesses refer to companies that handle affordable accounts receivable services. The services provided are very simple; your travel agency, for example, will likely eventually pick up a number of invoices for collection in 8, 15 or 30 days.
Accounts receivable financing gives you access to your money more quickly (about 80% of it, usually) and then takes care of collection on those invoices. When they are all paid, the service then gives you the rest of your invoiced amount, with a fee already subtracted from the total. It’s easy to use, and helps make billing and access to capital a lot easier in a crunch.