Now is the time to stay positive, to control the controllables…and to focus on what you can do to steer your business out of this crisis – and thrive on the other side.
As tour or activity business owners we should always be thinking of ways to make our business more resilient and our bottom line healthier. If you can use this time to make some sizable improvements across a multitude of areas in your business… you’re going to be setting yourself up for massive success when we bounce back.
Here is a summary of 5 things you should be doing to navigate this crisis – and set yourself up for success:
1. Manage and minimise any unnecessary expenses.
If you have one, pull out a copy of your most recent profit and loss statement. As you go line by line, ask yourself: What’s unnecessary? What’s essential?
Then start categorising these expenses. I recommend using these 4 categories: Keep. Cut. Defer. Negotiate
Once you’ve done that it’s time to get to work actioning each expense.
You’ve decided that now is the time to up the game with your marketing collateral. As such, you know that to play a bigger game you need some professional design and copywriting done for your tour descriptions but it’s most definitely not in the budget to hire freelancers for the job. Think outside the box. Can you provide some value that isn’t monetary?
Could you propose working on a strategy with these freelancers to help them get other opportunities with tour and activity operators in your community?
2. Get a cash flow forecast in place – based on a worst case scenario.
The reality is, things could get worse before they get better. So now is the time to get a cash flow forecast and a financial ‘buffer’ in place. Hopefully you won’t need that buffer, but…peace of mind does wonders for your creativity and productivity – which you’re going to need plenty of in the coming weeks and months. I would suggest getting on the front foot early and getting a financial buffer in place to help you focus on the job at hand.
Questions to Ask:
- Can you get a small overdraft facility in place with your business banker?
- Can you increase the credit limit on your business or personal credit card?
- Are there any grants you could explore with your national, state or regional tourism associations?
- How about government small business grants or hardship assistance? Recently announced stimulus packages?
I’m not advocating taking on debt – hopefully you never need it. But it can be very reassuring to know that buffer’s there. In my experience when you have that security buffer in place, you approach things in a calmer, more methodical way. Base your forecast on a worst-case scenario (i.e. what is the absolute minimum cash you need available on a monthly basis for your business to stay afloat for, say the next 3 months, or possibly even 6 months – assuming you’re not able to trade) and get that buffer in place well before you need it.
3. Focus on current and future revenue generating activities – and diversify
It’s so easy in times of stress and uncertainty to lose focus, get distracted and find yourself gravitating towards tasks in your business that you find ‘easy’. Focus as much as you possibly can on activities and initiatives that are going to make you money.
Get creative with your product or service delivery:
- How can you continue to get people on to your tour or activity?
- Can you restructure to run only private groups?
- Can you reduce the size of your groups?
- Can you strip out elements of your experience that may be considered a health risk?
- Can you put measures in place to make your experience safer and ease customer fears?
- Are segments of your local market still travelling? Is your experience geared to the local market? If not, think about how you could adapt your service or experience to different domestic market segments, or perhaps to various clubs, groups, or societies with an interest in your niche.
- What other types of customers are out there. Are there markets and booking channels that you haven’t considered before?
- Is there a digital product that you could create and use to build awareness of your experience, grow your list – and ‘warm up’ your target market? Better still, could you create a digital product with enough value that people would buy it?
A great way to inject some immediate cash into your business is to promote gift certificates to your community for future travel.
4. Minimise the damage
It’s inevitable that – as a business owner in a service industry – you’re being hit with plenty of cancellations right now. Try and convert as many of these as you can into future bookings.
When you receive a cancellation, first of all acknowledge that the customer is within their rights to request one and that you are happy to process their cancellation immediately…But then ask them the question: Would they consider allowing you to hold their payment over for a future booking?
Now is a great time to review yours and make sure it protects you in every circumstance. Your cancellation policy should accompany every booking confirmation – both bookings via distribution partners and direct bookings. It should be well-considered and fair. So I thought it might be useful to give you a little ‘look behind the curtain’ at what our cancellation policy looked like when I was running Melbourne Private Tours.
5. Seek community support and advice from a mentor or business advisor
It’s crucial right now that you don’t feel like you’re going this alone. Make a point of surrounding yourself with like minded business owners that are feeling your pain. Get involved in Facebook groups such as Tour Operators United and How To Grow a Tour Business. There are literally thousands of members in these groups sharing tips, ideas, suggestions, best practice and up to date information. Sign up for webinars such as Arival Online, and free resources. Reach out to operators in your city for a chat…we’re all in this together.
If budget allows, consider finding a mentor, or engaging a business coach. A business coach can change the way you approach the business and introduce you to new concepts that are critical for any micro business with ambition to scale.
So, hopefully you’re now armed with a whole bunch of practical, actionable tips, ideas, suggestions and inspiration to ride this crisis out and prosper on the other side.
Josh Oakes is the founder of The Sunshine Tribe – helping tour and activity operators across the globe build amazing businesses and create awesome lives for themselves. He is also the co-creator of Seven Figure Tour Business– an online program teaching his proven, step by step system to get more customers, scale operations and drive more profits in your tour business.
<<If you want to learn how to systematically grow your sales, scale your operations and drive serious profits in your tour or activity business…then come and join Josh on one of his free online workshops using this link>>