Putting the Family Business on the Market: One Agent's Story

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Selling a travel agency is a major step, but it is one option that a number of retailers are no doubt considering in the wake of the latest airline commission cuts. In the following report, Steve Kingsbury recounts his and his wife's experiences selling their business, Going Places Travel of Boston, after commission caps were introduced in 1995.

On July 1, 1996, my wife, Marilyn Wexler, and I sold our Boston-based agency, Going Places Travel, to Direct Travel, headquartered in New York. After opening in 1985, we built Going Places into a profitable $10 million agency. In February 1995, when the first airline caps were imposed, it was obvious to us that, given the growing threat of bypass and -- we believed -- inevitable future commission reductions, ours would become a fee-based business.

We asked ourselves if we were ready to borrow money for the technology (and the personnel to run it) that a fee-based industry would require and if we were ready to put in even longer workdays to manage a more complex business. We also have two small boys who already were not seeing enough of their mom and dad.

After much soul-searching, we decided to sell for economic and lifestyle reasons. We believed a larger agency would have the resources to thrive in a business environment that was about to evolve rapidly and, we felt, merging with such a firm was the way to gain long-term job security for ourselves and our staff. It was not an easy decision. However, having made it, finding a buyer was not as difficult as you might think.

I initiated discussions with some prospects locally. I also began responding to the solicitation letters I received periodically from brokers, specifying that I was only interested in large, privately owned agencies that recognized the value of leisure travel and independent commissioned agents.

In this way, I found a broker whom I trusted. He introduced us only to quality buyers and to companies that met our criteria. He brought us together with Herb Edelberg, president of Direct Travel. The company met our needs, but beyond that, Marilyn and I had an immediate instinctive feeling that we had found a man of honor and integrity. This became as important, or more important, than the operations of Direct Travel. Then the fact that he offered us a package that was fair and generous and that included long-term management contracts sealed the decision. Our sale provided for a payout to cover a period of years, with the total to be related to the agency's success in that time.

All prospective buyers were interested in continued involvement by Marilyn and me, mostly for two or three years. Direct Travel offered a much longer-term relationship. It also was important that we and our employees received increased benefits.

We retained two additional experts to help us conclude and close our sale, an industry consultant to guide us through the selection and negotiation process, including analysis of our options, and a travel attorney to handle the legal issues. They provided the kind of professional assistance that I would recommend to anyone selling an agency.

The transition was not easy. When selling, there is a need to switch gears from being an owner to being an employee. But we appreciate that we work a normal work day now, with less pressure, and we believe the future is promising with Direct Travel's resources.

Marilyn is Direct Travel's leisure manager for New England in the Northeast, and I have become a computer project manager. I am able to work at home, which is extra meaningful for us because our children are young.

Each owner has to do an analysis of what may be best for his or her own business and personal situation. In light of today's circumstances, we do not believe the company we founded would have survived intact. Marilyn and I have no regrets, and we believe we have made our future as secure as one reasonably can.

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