HOME-BASED AGENTS

Welcome to Unit 7

Review of unit reading material from textbook:

Travel Career Development 8th ed. Authors: Gagnon,P. & Houser, S.

What are some issues and concerns in owning your own

business?

Lack of socialization or interaction with others.

Support from other departments such as advertising, accounting or tech support.

What might be some benefits of a home-based business?

Cost-cutting of expenses such as rent, utilities, salaries, benefits, and other payroll related requirements such as social security and worker’s comp insurance.

The internet has made it possible to conduct business from just about any location.

No commute time, business clothes (unless meeting a customer) and no gas for a car!

Can be home more with the family.

While working from home an agent must be able to have relationships with others in the industry in order to conduct business transactions.

In any business an individual will need to ask advice or information from another but a home-based agent lacks these other people in which to ask a question.

There are a few support networks for the home-based agent too.

Joining a professional organization not only helps network within the industry but can supply this needed support.

Two Support Groups

NACTA (National Association of Commissioned Agents)

OSSN (Outside Sales Support Network)

Both of these organizations provide numerous information and benefits to members. You can see the benefits on page 349 of the text.

The Business Plan

No matter what business a person opens it is helpful to have a business plan.

What information does a business plan provide?

Page 350-351

Information provided on a business plan includes:

1. Your business expectations. These should be detailed and thorough and include your expected income or salary, how long do you expect before the business will generate the income, number of employees, part-time or full-time, their salaries and benefits.

2. The business concept- what is the niche, who is your competition, concerns for seasonality or a slow market and how you will handle these issues.

3. The mission statement. This is the purpose of the business.

4. Objectives of the business- what are the goals of the business and what are your expectations for long term goals.

5. Income projections-do you need funding from a bank such as a loan. What are the 1 year and 3 year business incomes? Other expenses?

6. The business name. You will have to make sure the name is free to use and not held by another company.

Legal or Accounting Requirements

A lawyer or accountant can help to set up corporation papers or other legal documents for a business.

What are some of these documents:

Page 351

1. A fictitious name. This is a Doing Business As document stating you are the owner doing business as the name of the agency.

2. Type of business. Will this be a sole proprietor, LLC (limited liability corporation), a partnership or a corporation? Each of these has different legal requirements so it should be investigated.

3. You must have a business license even to work out of your home and some communities do not allow a person to work from home so this should be looked into in your city.

4. Business insurance is needed as well. It is a must! Professional organizations often have insurance policies to purchase or you can talk to your personal insurance agent too. Some offer business insurance.

5. Disclosure forms. These are forms offered to clients indicating that they are aware of all information communicated to them from the agent. This help to prevent legal problems from a client.

6. Travel contracts-have an attorney look over all contracts prepared for suppliers.

What can an accountant do for the home-based

business?

Page 351

1. Prepare necessary taxes for the type of business established.

2. Evaluate the content of the business plan.

3. Set up your books for the business accounting system.

4. Assist in opening a bank account; an account for expenses and one for holding client’s funds.

5. A merchant account with a credit card company or you may choose to use a host’s credit card account.

6. Set up a federal tax ID. This number is used for business identification and is often needed as proof of business ownership.

Office Supplies and Equipment

Office space must be set aside and used completely for business in order to take as a tax deduction. If you work off your dining-room table this won’t be considered as an office.

Page 352-353

Office Furniture

Desk and chair

File cabinet

Shelves for travel related books.

Equipment

Business telephone with a business number; don’t use your home number.

An 800 number might be necessary if you plan to have clients outside of your local calling area.

Have a voice mail with a professional sounding message.

A good computer with fax capabilities

An Internet provider.

Computer software for an accounting program or web design if you plan to handle these yourself are also necessary.

A Webpage

You can develop the website yourself or you can have a web designer do one for you. You could contact a local school or college and inquire about students in the IT program particularly those in web design.

Page 353-354

Some considerations for a web site are:

The purpose- is this a form of advertisement; can potential customers make reservations or email from this site?

Choose a domain name close to your business name if possible and a hosting company that allows your website to be connected to the Internet.

Maintain the site. It is important that the information on the site is always current.

Evaluate the site’s effective and make

changes as necessary. Customers like to see improvements and changes even on websites so improving the look or visual appearance is critical to catch the customer’s eye.

If an agent wants to work through a host agency there are a two concerns to look at:

Selecting a host agency and

Signing the contract.

Page 355-356

Questions or features to look at for working with this host

What is the host agency’s specialization? Is this compatible with your goals and business plan?

What type of training do they require? Do they provide training?

What kinds of support are offered?

How long has the host agency been in business? What is their experience?

Do they have references and belong to a professional organization?

How well do you work with the other agents and management? Are you compatible?

Are there any travel benefits or discounts to you as an agent?

What are the cost involved; what is the commission split?

Always have a contact drawn identifying important elements for the independent agent.

A list of these are in the text on page 357.

The first year of any business is the hardest and it is said to have 6-12 months of money to fall back on or another job that will support you while you develop your business.

References

Gagnon, P. & Houser, S. (2005) Travel career development (8th ed.). Canada: The Travel Institute

Next Week

Finding a Job!