start up costs

Start up Costs

Premises

When starting up your own travel agency you can initially work form home which will not cost you anything. All that would be required would be a PC and telephone line and you could start building up your client base through friends and family.

Although this will be sufficient in the initial stages it wont allow your business to survive or make money in the long run so it is crucial that you expand your company as soon as possible. For example, opening up a shop locally and then opening another and another. Therefore, the cost of renting or buying a shop will be a huge outlay and also depends on the location you choose. However, it should pay a return in the future. You will need to also pay for computers, furniture, lighting etc for the shop and staff.

Staff

The staff that you employ are extremely important because they are the ones that are going to be providing the customer service that will make your company stand out from the rest and become a success. Thus, you must recruit experienced members of staff and treat them well. The pay that they receive is probably only the same as office workers but you must provide good working conditions and discounted holidays.

Civil Aviation Authority (CAA)

You must pay money for an Air Tour Operators License (ATOL) from the CAA. The amount you pay depends on how many passengers you intend to cater for each year. The license is valid for one year and you will need to pay an annual renewal fee.

Trade Associations

Again you must join one of the trade associations if you want your travel agency to go anywhere and this is a huge cost. Obviously it would be more suitable and cost less to go with Global Travel Group for instance but as your company begins to grow it will be worth while joining ABTA. Thus, you must have the funds available to join one of these trade associations write form the beginning.

Computerized Reservation System

You must have money for the subscription of a computerized reservation system. This will normally be a monthly fee of £45.

Electronic Funds Transfer System

You will need to have a Electronic Funds Transfer System to take credit and debit card payments from customers. You must find out if your bank requires a bond to cover compensation payments in the event of problems with customers holidays. If you take cash as well then you will need an electronic till as well.

Advertising

You must try and advertise your company in as many ways as possible which will inevitably cost you money. Advertising in yellow pages, teletext, Internet, local and national newspapers. The cost of these all depend on what size of advertisement you have. Therefore, the larger the advertisement the more money. Although you do not want to spend too much money in the early stages of the business, advertising is initially the only way you are going to get noticed so you must invest in it.

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