There’s a moment at some point in your business journey – you might be in the gym, or driving home, or leaving your accountant’s office, or taking a shower – and you think to yourself ‘wow! We built a serious business…like a real business that makes good money and has staff and an office and a bright future and people like what we offer and we have repeat customers and feedback is great and we have weathered those turbulent early years that kill so many small business and…we’re going to make it!
It’s a great moment and an indescribable feeling – it was for me anyway and I remember it like it was yesterday.
For our business, that point came in mid 2010 – pretty much three years to the day since we started out:
So how did we go from ‘pretty damn good tour operator’ to ‘multi 7-figure company’?
When we got there, we already knew what was next – we had already done the work and we were crystal clear on what our 5 year vision for our business was.
There were a lot of details that went into that 5 year vision that we created back in 2010/2011 however the core elements were: we wanted to be making $2million in revenue per year and we wanted the business to be doing this without Suze and I working ‘in it’. We wanted to be working for the most part remotely, we wanted the freedom to travel when and where we wanted and we wanted the time to work on additional projects while our team reported into us regularly.
It seemed pretty ambitious and unrealistic at the time and sure as hell there were times along the way that we thought we were kidding ourselves, however we kept going back to that vision and we finally got there.
For a small tour operator like MPT to make that jump to multi 7- figures there were a few critical things that happened:
We diversified. We put multiple revenue streams in place. How? We listened and we innovated. First of all, we noticed that we often received tour enquiries from Melbourne based executive assistants, personal assistants, sales managers, HR managers…and the like saying something along the lines of ‘we love the look of tour x, y or z – could you tailor this tour for my team or my clients?
Boom! MPT Corporate Events was born, offering client engagement events, team building, reward and incentive days, company Christmas parties, EOFY events and more.
Next came MPT Worldwide Journeys – offering ‘once in a lifetime’ celebrity chef led culinary journeys to Spain – amongst other things. We also created small group scheduled culinary journeys throughout Australia aimed at the high end domestic market with the aim of running these right through the slower winter months and snow tours for the Singaporean market…the list goes on. All of these complimented the core Melbourne Private Tours product offering beautifully and kept us busy outside of the peak travel season.
You need to think outside the square. To illustrate – as I write, I’ve just finished reading an article on the massive worldwide growth in the Accessible Tourism market – travellers with a disability. Not many are doing it right and there is a huge opportunity for tour and activity operators to step into this space.
We knew we needed high level systems. Now is the time to invest in that reservation system. Shop around. Talk to other operators. What works for many may not work for you. If your business is unique by nature then you need to find something that really speaks to you . Our business was heavy on ‘touch and feel’ with plenty of changes and detailed and tailored travel itineraries. It was therefore very hard to find the right system. We had a few false starts that cost us a lot of time and productivity. Once you settle on the right choice for your business, make sure that you take some time to test it before committing fully. Don’t nickel-and-dime with the systems and software that will be the lifeblood of your business as it grows. Pay for the right service and move on. A few sales a month, or avoiding a few costly refunds due to system or operations errors will more than pay for these relatively minor costs.
We went ‘big’ on capacity. ‘No’ was a dirty word in our business. We got our capacity to a point where in the middle of our peak travel season we had the resources to send out 20-25 individual private day tours – that’s 20-25 drivers and 20-25 vehicles. At an average retail price of a little over $1,000 per tour, those kind of numbers started adding up fast and you’ll do anything to avoid leaving any of those $$ on the table. After the tough times we had in the early years, I always drilled it into our operations team – grab every opportunity and never say no – we’ll make it work. By 2016 We were making 450k in sales in 2 just months (December and January) That’s where the difference is going to come from. Make hay when the sun shines – why were we working so hard to win customers if we were going to start declining their business when things got busy? When we were pushing hard for that extra 10k in sales in August, we were always thankful for the extra 50k in sales we were able to make in the peak season by pushing the boundaries with regards to our capacity. BUT whoever you bring in to help your business through those peak times in order to increase capacity, they MUST understand your products, your processes, the way YOUR business operates. They must understand and ‘buy in’ to your company culture. It doesn’t matter how experienced they are, how they have done things before. It is critical that they embrace and respect the way you do things in your business.this needs to be done by way of a written manual and an agreement in writing.
One of the things that helped us greatly was creating our vision, mission, core values and brand promises and sharing these with our growing permanent and temporary team:
VISION, MISSION, CORE VALUES, BRAND PROMISES
The client is at the core of everything we do
We are Flexible, Insightful, Creative, Consistent & Exciting
We treat each client with Respect, Enthusiasm & Care
We value a ‘Can Do’ attitude
We strove for an even ‘12 month’ effort. There was no such thing as a ‘slow season’ – as our peak season approached, we were already planning ahead for the Australian winter (traditionally our ‘low season’ – and a better peak season. We adopted the mindset that there was no ‘slow season’. We wanted the output of your team to be as even as possible throughout the year. That meant better preparation, better improvements, processes and systems to ensure that the peak season was easier, less stressful, less exhausting and time consuming – even as the business grew. This allowed our staff the time throughout peak season to maintain momentum and ensure they were working concurrently on projects designed to boost business outside of that traditional peak season PLUS making improvements that would help us in the following peak season 12 months from now.
We assembled a great team. Make sure there is absolute clarity surrounding their roles and that they are highly incentivised to succeed. As I have written before on the subject of hiring, when you feel like you are stretching at the seams, when it feels like progress is stalling, when the improved systems that you are creating are still not freeing up time across your business and you feel certain that your team needs to grow, then the first thing you need to do is get down on paper every single task in your business that gets done over a two week period and exactly how long your team are spending on those tasks and how much time they think they should be spending to get the job done. You’ll need help here. There will be grumbles – along the lines of ‘we don’t have time to record our time’. You’ll need to assure everybody that the benefits are huge. By doing so, you’ll soon know exactly where you need help.
From there it’s all about creating the right position description, based on the exercise above, you’ll be able to drill right down into the expected roles and responsibilities and exactly how much time you think each of these roles and responsibilities will take.
Then you’ve gotta find the right fit. I’m a huge believer in prioritising things like: chemistry you have with a candidate, a ‘can do’ attitude, empathy, kindness and calmness, positivity, a ferocious work ethic, consideration, understanding or your core values. These kind of attributes will shine through in an interview if you ask the right questions. They may not stack up on paper, they may not have the most relevant skill set, or recent experience. But – you can teach this kind of person skills – and fast with the right business systems and processes. Its harder to teach them attitude. These are the people you want in your business.
From here, you’ve gotta make sure where everyone knows where they fit in. You’ll therefore need a company ‘organisational chart’. It doesn’t matter if you have four staff or twenty four. It’s critical that everyone knows their place. Ours looked like this:
The next step – create a Roles and Responsibilities document. This is where you write down every task that every staff member performs in your business. We used categories such as: Sales/Marketing/Operations/Product Development/Accounts/Administration/Human Resources. It takes some time BUT it is awesome for for your business. everybody knows exactly what they are responsible for and exactly what everyone else in the business is responsible for. When there is any doubt or confusion, it is there in writing, clear as day for you to look back and refer to. When two or more people share responsibility for a task, we simply *asterix the ‘owner’ of the task.
Finally , we created a ‘bonus scheme’. We called it our PDP (Personal Development Plan) everybody in the business had one – including the General Manager. We worked together with each staff member to create it and welcomed their input. We had a mid year review and end of year review. Based on this review, our staff had the ability to make 10% of their salary in bonus. Our PDP was divided into three sections: Company Wide Objectives/Role Specific Objectives/Personal Development Objectives.
Tip: always schedule the review for around one month or more after the period on which they are being assessed, with the actual bonus payment to be made approximately one month after that. This means that by the time by the time the actual bonus payment is received, your staff are nearly 3 months into the next period for which they will be assessed. I have found that this helps keep your staff keen motivated, focussed and loyal.
We focussed on an even revenue spread and try and avoid any unhealthy reliance. By the time we were making $2million in revenue per year, we felt we had a really comfortable revenue spread. Our top handful of key agent accounts totalled just $750k per year, the rest came from:
The remaining agents outside the top 5
Direct business via our website
Online booking platforms
Other divisions of the business (MPTCorp /MPTWWJ)
Each of these had potential for growth and it meant we slept well at night knowing that if something happened and revenue dried up or even disappeared from any of the above, our business would be fine.
If you are at the point in your business where you’ve turned the corner and now feel ready to shoot for the stars, make sure you are doing these things and…you’ll get there!