Strictly business: A portrait of the home-based superstar

By Stanley C. Plog

One of the more unexpected findings of a study on home-based agents recently commissioned by Travel Weekly was the surprisingly low annual revenue and net income of most agents who work out of their homes.

Even the majority of those who work full time at the profession take home a modest salary from which they must pay all the costs associated with their business, in addition to membership dues to various associations and trade groups and, if they use a host agency, fees for those services.

However, the study also showed that a select few home-based agents clearly have developed highly successful business models and earn incomes well above the average for U.S. households.

So what factors differentiate the highly successful home-based agent from the vast majority, who earn less or just a little more than minimum wage? What models do they follow? How do they exceed the norm, in some cases by wide margins?

As a follow-up to Travel Weekly's previous two articles that reported on the results of questions asked of home agents, suppliers and agent associations to get a better understanding of the characteristics and value of home-based agents, we decided to take a look at this elite group of top-flight agents to find out what distinguished them from the rest of the pack.

Tiny group of superstars

A total of 1,062 home-based agents participated in the primary study. For this follow-up, those agents were divided into five categories based on the income they reported having earned in the previous 12 months.

The data make it clear that the vast majority of home-based agents make a substandard living operating out of their homes. In fact, 80% take home less than $30,000 before business-related expenses. Of the remainder, just 5% are superstars who earn more than $75,000.

Stories abound in the travel industry about some home-based agents with six-figure incomes, but little is known about them or even about how many there might be. Our research suggests it is reasonable to estimate that there are only about 1,100 of these high performers scattered around the U.S., or about 5% of the country's estimated 22,000 home-based agents.

Taking care of business

The clearest statement that can be made, based on the data tabulated for this report, is that the highest-income home-based agents, as a group, are much more committed to detailed planning and are more focused, systematic and businesslike in their approach to their daily operations than agents who earn less, especially when compared with the lowest-producing agents.

Successful agents have decided to make travel a business, not a hobby in which to dabble part time. Although, like most of those surveyed, the superstars admit that they enjoy travel as a profession, they don't allow personal interests to interfere with their desire to be successful in their profession. Their focus, emphasis on planning and level of motivation set them apart from their less-successful colleagues.

The most dramatic evidence for how this group differs can be summarized by annual revenue and annual income. A few facts stand out in this regard.

First, sales volume increases consistently through all groups as income increases, as would be expected.

But more significant is the standout performance of those in the highest-income group. Income rises consistently, but it makes a significant jump for those who place in the highest category. Those agents take home an average of $130,000 annually before expenses.

Comparing the data underscores the superb performance of the superstar group. Twenty percent of the revenue they generate stays in their pockets vs. only 5% for those earning under $5,000 a year, 7% for those in the $5,000-to-$15,000 category, 8% for those in the $15,000-to-$30,000 range and 9% for those in the next-to-top category who earn $30,000 to $75,000.

The top group probably gets higher overrides and more incentives because of their volume, but as we will see later, they also pursue more systematic business practices.

As would be expected, the average number of clients served by each group rises as income rises, in a straight-line correlation. The top agents serve about 8.5 times more clients than those at the low end of the scale. However, when comparing the data, we see that the top agents earn 43 times more income than those at the low end, and even 2.8 times more than is earned by those in the $30,000-to-$75,000 bracket. Clearly, there is something truly different about this high-end group.

Vive la difference!

A search for what differentiates this group produces some surprises.

For example, they measure at relatively average levels on a number of demographic and professional characteristics. They have been travel agents for a few more years than the overall average (17 vs. 14) but not as long as the 19 years of experience for those in the income category just below them.

However, they have operated as home-based agents for the longest period of time: 10 years.

They also follow the norm in having worked previously as retail agents. Sixty percent of the superstars fall into this category, though that is significantly less than the 79% of those earning $30,000 to $75,000 who previously were retail agents.

Notably, they put in the most hours at the job each week, 46 on average, but that is still less than the 50-to-60-hour work weeks of many successful persons in other professions. Thus it is not just how much time they devote to work but the effectiveness of their daily efforts that seems to matter.

The statistic that stands out the most is that the top-earning group includes the highest percentage of men: 44%, compared with just 19% to 25% in the other groups.

CONTINUED...

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