Starting Your Own Agency

You've decided to take the big step. You have the experience, you know the travel business, and you've put aside a few dollars to get you started. Now what? Where do you start?

"Before you take that first step," says Anne Rose, Celebrate-Travel Inc., Cameron, CA, "you must give serious consideration to the most important factor of all: Are you temperamentally and psychologically suited to being a business owner? Are you prepared to handle all of the responsibilities and pressures that go along with running your own travel agency?"  Visit the proper authorities to find out details about local ordinances that may affect your business plan

If you're satisfied that you've passed that test, you're ready to move forward. In launching a new business, some things are obvious. For a home-based travel agency, your most important physical consideration is the location of your office. In addition to the need for adequate space, you'll want to make sure that business operations won't interfere with normal family activities. Clashes between the need for family privacy and the sometimes hectic nature of business operations can be disastrous for both family and business.

You know that your computer must have adequate memory and storage capacity to handle growing business demands. Your basic equipment will also include a quality printer, a fax machine and a separate telephone line. Chances are that you've already planned for these basic needs. Here are a few less obvious considerations that will help you to round out your business plan.

Exploring Local Ordinances and Deciding on Legal Structure

Most municipalities have local laws affecting the nature of business operations conducted out of home offices. You don't want to find yourself in violation of a local ordinance that could result in fines, severe restrictions in the operation of your new business or even the need to discontinue operations.

Visit or call the zoning office in your municipal headquarters building for details on local ordinances that may affect your business plans.

As for legal structure, nearly three-fourths of the millions of small businesses in America are sole proprietorships, according to the U.S. Department of Commerce. Obviously, that makes the "mom and pop" form of business the most popular choice for entrepreneurs. But is it the best choice for your home-based travel agency?

There are three basic classifications of business entities from which to choose: sole proprietorship, partnership, and corporation. Each has its own distinct set of advantages and disadvantages.

The simplest, least expensive way to launch a new business is, of course, as sole proprietor: little or no legal expenses, no complex tax structure, no one else to interfere with management decisions. Setting up a sole proprietorship is an easy job; you can do it without the assistance of an attorney or accountant regardless of the state in which you are doing business.

But remember, as a sole proprietor, you have unlimited personal liability for all debts against the business. Both your business and personal assets are at risk in the event of legal trouble.

"We started out as a sole proprietorship," says Rose. "When my daughter joined the business, we considered a partnership. After much consideration, however, we decided that it was time to incorporate."

Unlike sole proprietorships and partnerships, corporations are legal entities that exist separate and apart from the individuals who create them. One of the major advantages of the corporate form of business is the protection it affords for the personal assets of the owners.

Travel Specialists, LLC, Denver, CO, uses another form of business known as a Limited Liability Company. In many states, a limited liability company is a legal form of business similar to a corporation. It is a somewhat more flexible form of ownership, especially suitable for smaller companies with a limited number of owners. Take Advantage of available resources

There is, of course, far more to consider when choosing the best legal structure for your agency. Your accountant will be able to offer advice on which is the best choice for your business. The Small Business Administration has an excellent booklet with additional details. For a copy, log on to

Registering Your Business Name

"Obtaining all of the required permits and registrations for our new business was a nightmare," says Rose. "Because we weren't prepared for the task, it seemed overwhelming. You can avoid that bump in the road by doing your research and being prepared for the necessary work." Doing your research will help you become prepared for the necessary work involved in setting up your business properly

Depending on your business structure, you may be required to register your business name with the local, state or federal government. If you structure your business as a corporation, in most states your business name will be registered automatically when you file your articles of incorporation.

If you structure your business as a sole proprietorship and you don't use your own legal name as the business name, you must comply with the fictitious or assumed business name requirements of your state. This requires registering the name with a government agency. In some states, you must register at state level. In others, you will need to register at your county clerk's office. In either case, the procedure is usually quite simple, involving little or no cost. A phone call to your county clerk's office should get you the information you need.

Setting Up Credit Card Merchant Accounts and Bank Accounts

Being able to accept credit cards from your clients is a practical necessity, but finding a company that will set you up with a credit card merchant account can be a frustrating task.

"This can be one of the most difficult steps in your business plan," says Rose. Many of the companies that set up credit card merchant accounts will not consider travel agencies." Several companies turned Rose down until she learned about Outside Sales Support Network, a trade association that specializes in travel agencies. "They were a joy to work with," says Rose.

Phil Bryant of Travel Specialists says that he had little trouble working through Nexion, a network of independent travel professionals.

You know, of course, that it's always best to keep your personal and business finances separate. In order to do that properly, you'll need to have a bank account in your business name.

Before your bank will open a new account in the name of your business, it will have to see evidence of proper registration. For a sole proprietorship or partnership, you'll need a certificate of registration with your proper state or county office. If you are incorporated, a copy of your articles of incorporation will suffice.

Connecting to the World

Arguably, no other part of an agency set up is more personal than the choice of an Internet and phone service provider. In all likelihood, you already have both an Internet and phone service provider for your personal needs. If you're happy with the service you're getting, it's probably best to stick with a company you know.

Many of the larger telecommunications companies such as Verizon, AT&T and Qwest provide Internet, cell phone and land line phone service. Most of these companies offer package deals that can save you considerable amounts of money if you use the same provider for all three services. Travel Specialists has such a package deal with Qwest.

And, of course, it's possible to operate a travel agency without a web site (Bryant says, "We considered it, but decided we didn't need it"), but it's not recommended. In the minds of most agents, working without a web site becomes more impractical with every passing year. In our electronic age, most vacationers and business travelers have come to rely on the Internet for basic travel planning.

"It's important to have an online presence," says Rose. "We've always had a web site and it has undergone numerous iterations since we started."

Rose feels that it's best to outsource the job of designing and setting up a site. "Being a travel consultant and agency owner is a full-time job, so I did not want to take valuable time to learn how to become a web site designer."

You should have no trouble getting recommendations for a site designer from among your personal network of business associates. If that doesn't work, try (where else?) the Internet.

See "The ABCs of Creating a Web Site," for specific info on creating and maintaining a web site.

But Wait, There's More

Just when you think you've thought of everything, something else will pop up. Don't forget business cards and stationery. For a professional look, you'll need a logo. While computers and easy-to-use software make it possible to design your own logo, it's probably not a good idea. If there's a graphic design school near you, a student artist may be able to do the job for you at little cost. Otherwise, ask for recommendations from your business associates or local print shop owner, or try Craigslist.

Obviously, the road that leads from the world of employee to the world of entrepreneur is chock full of bumps and potholes. However, most of those who have made the journey say that arrival at the final destination made it all worthwhile. Remember the advice that you give your own travel clients about advance planning; it will serve you as well.

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