To sell or not: A perspective

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Were the latest commission caps the last straw? Are you seriously considering selling your agency? To help you sort things out realistically, here are some perspectives from several different sources.

moneypanicheadFirst, here is the picture from two agents who decided to get out of the business entirely. (In weeks to come, watch for more case stories of sellers who stayed in travel.)

Both former owners, coincidentally, chose real estate as their new gigs -- a good choice, said Dick Monteith, because it's similar to the travel industry. "It was hard giving up being the boss, and it would have been hard to work in a corporate structure," added Monteith. "In the real estate business, I'm basically self-employed."

Monteith sold his $5 million agency, Raleigh, N.C-based Monteith Travel Services, in 1997 because the first commission caps hit him hard. After being in the business for 15 years, he does miss it. Sometimes. "It's very tempting to want to coach the people that bought us, but then I remember, it's not my problem anymore," he said.

John Frazier sold his agency, Travel Unlimited in Charlotte N.C., last January after more than 10 years of operation. His shop was run by a manager, while Frazier had a real estate business on the side. Lacking a deep knowledge of the travel industry, he "decided this business wasn't one I wanted to learn. It seemed to me the airlines were getting tougher and tougher in taking away commissions."

Frazier wanted more control and disliked the fact that outside factors were controlling his profitability. "That's not the kind of business I wanted to be in."

And when Frazier tried to move away from a mostly corporate client base into leisure, he was unable to sell enough to make a difference. So he asked, "Why fight this when I have another business I can go to and do well in." For Frazier, "It was the right decision. My life is simpler, and I'm doing what I really enjoy."

For Monteith, things look better too. "I'm making more money now than I made in the travel business, with a whole lot less stress."

Before you sell...

Bob SweeneyBefore you try to sell your agency, take the following steps first, suggested by Roswell, Ga.- based real estate broker Bob Sweeney (who brokered the deals for the two agents mentioned above) and Ellicott City, Md.-based travel lawyer Jeff Miller:

  • Talk to your accountant and do some financial projecting. Are there places where you can safely cut your overhead to enable you to survive? Do you have enough money to pay your bills and also take a salary?
  • Other financial questions to consider: If you didn't have overhead (rent, CRSs), would your agency be profitable? If the answer is no, then you're a strong candidate to close down. If yes, then you can take your business elsewhere -- by establishing a home-based shop, or by affiliating with another agency.
  • Ask yourself : What do I want to do with my life in three or five years? What other skills or interests do I have? Am I young enough to look for another job? Or am I ready to retire?
  • Can you mentally picture yourself not being the owner? Some people could never work for anybody else. But if you can, "the reality is you have to do a strategic alliance with someone larger if you're a midsize agency," said Sweeney.
  • Managing those feelings

    Former travel agency owner Dick Monteith got out of the business after "a good run" of 15 years. "It wasn't our failure," he noted. "Our time was just up."

    Before he came to this realization, though, he grappled with a feeling of guilt. But he finally decided that his agency's stall after the caps "wasn't my fault. The industry changed. Prospects would say, 'I love your knowledge, but I can get it for 25% less someplace else.' It's like in the movie 'You've Got Mail,' " he noted. "Meg Ryan didn't mismanage her small, independent bookstore, but it was closed down when a superstorebookstore opened around the corner." Still, "you need to deal with that guilt before you can move on."

    Monteith also advised owners pondering their options to avoid the "paralysis of analysis," or thinking too much before making a move. "If the marketplace changes and a business no longer works, then you need to come to terms with it," said former agency owner John Frazier.

    "There's a definite grieving process," suggested Frazier, who was a clinical psychologist before trying the travel business. "You go through denial, when you don't want to believe it, then depression, self-blame, anger and bargaining. Then you realize that you can survive the letting go of your business and still be a whole person."

    Frazier suggested, "Get a good friend, clergyman or counselor and talk it through. It's tough going through this. Ask yourself, how can I get out with the least amount of loss and make a plan for going forward?"

    Reasons to leave

    "Agents are leaving the industry not necessarily because business is so bad but because of the certainty of the uncertainty," said Dick Landis, head of Travel Agency Management Services, a Wayzata, Minn.-based network of agency owners. "Agents feel put upon and tired of the rancor and the struggle. This is the case in a lot of industries that have expanded as fast as travel has," said Landis.

    "A lot of people got in for the wrong reasons, and there will definitely be a shakeout." He added, "If I was going to get out of the market, I'd make a list of who I thought my potential buyers were, and spend some time trying to position it so my agency was attractive to those people.

    Then, said Landis, "I'd establish some kind of communications link with them. "For example, send them a letter and say, 'I'm interested in selling or consolidating my operations, and you're somebody I'd like to talk to.' "

    Net News

    This week's Web sites feature Paris and Italy.

    Paris tourism

    San Francisco agent J. J. Lasne recommended this site for information on his hometown in France. There's information on children's activities, shopping, museums, nightlife and more. One especially nice feature lets you find restaurants by criteria such as "with a view" and "open after midnight." There's even a list of "philosophical cafes." Say bonjour to: www.paristourism.com

    And for Italy

    Looking for links to sites with information about the Catacombs of Rome, the Uffizi Gallery in Florence or the Vatican museums? This site is a good starting point to find all sorts of information about the country, including specifics on the major cities. It's also fun to check out the art treasures pictured here. Say buon giorno to: www.italiantourism.com

    Compiled by Jennifer Dorsey. E-mail suggestions to [email protected]

    Bean bags and clothes

    travelerMemo to all you shop-by-mail catalog junkies: There's a new source of travel clothes and gadgets from a veteran in the mail order field, Freeport, Maine-based L. L. Bean, which has a new "Traveler" catalog available.

    The company includes some of its basic items of comfortable, practical sportswear in this book, along with pieces specially designed for the traveler.

    For example, there's a line of matte jersey essentials for women, in a quick-drying, wrinkle-resistant, lightweight black knit; a cotton knit travel hat, and SPF Tropic Wear clothing (pants, shorts and shirt) made with a fabric treated to provide the highest level of sun protection for tropical climates.

    Also notable are a roll-up Panama straw hat; a complete collection of luggage including rolling bags with a wider wheel base for "tip-proof" carrying; a first-aid kit, and a luggage lock with a motion-detecting alarm system. For more information, call (800) 221-4221 or check out the Web site at www.llbean.com.

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