If you’re thinking of starting a travel agency from home, you’re in luck. The start-up costs are relatively low and there are plenty of opportunities for someone with the passion for selling travel. Utilizing a host agency makes it a ‘plug-and-play’ experience with very little risk or low up-front costs.
Why Use a Host Agency?
The first thing you’ll want to do is start looking for a host agency. For independent agents (those not employed by a travel agency), about 50% go with a host, 50% chose to go on their own. I’m an advocate of a host agency for nearly all agents new to the industry; the 50% that choose to go on their own are nearly all experienced agents with large books of business and established supplier relationships.
Now, if you’re asking ‘what is a host agency’ that’s a key component to understand. Start by reading our post covering that topic.
Next step, understanding why you need a host agency. In a nutshell, a host agency will keep your costs down, allow you higher commissions, do back-end work like commission tracking for you, and provide training and support. Some even include Errors & Omissions insurance. Our 7 benefits to using a host agency article goes more in-depth into why you would want to use a host travel agency.
When you use a host agency, you don’t have the cost or hassle of getting your own ARC, CLIA, or IATA number. You’ll use the host agency’s accreditation number and be under their umbrella. If you are an agency using the GDS, the host files the ARC report, saving you tons of time each week where you’re not filing the darn thing. Another bonus? They also save you lots of moola by not having to be an ARC appointed agency and in some cases, help you earn more through their agency’s exclusive airline contracts.
One last note on saving you money. Travel host agencies add a little more change in your pocket by taking care of some of the required travel agency licensing.
It’s true, you don’t need a host agency, you can go completely independent or join a franchise, co-op, or consortium. However, when you’re starting a travel agency from home, having access to the higher commissions, experience, and tools the host agency offers will be extremely helpful. Beyond that, they offer lower risks and investment while also giving higher commissions.
Getting Ready to Start Your Home Based Travel Agency
You may be excited to start your travel agency from home but there are some things you will want to take care of before signing up with a host travel agency.
- Choosing your travel agency’s name – The host agency is going to want to know your travel agency name for their records so have it ready. You’ll also need it for the rest of the list below. Read our ‘Tips for Choosing Travel Agency Names’ for some guidelines and make sure to buy the domain. Don’t forget to find a travel niche before you name your travel agency!
- LLC or Sole Proprietor or Corporation – You’ll want to talk to your tax advisor to see where you’ll get the largest financial benefits. Most small agencies with few assets start with sole proprietor. If they get large enough, they’ll move to an LLC. One thing to note, figuring the best fit out ahead of time is a good idea. You can imagine the expense and paperwork needed by banks, the state, etc. when you legally change your business name.
- Register DBA/your company with the state – A DBA is “doing business as”. If you choose to become a sole proprietor, you may need to register it with your state as a DBA. The Small Business Administration (SBA) website shows how to register your company’s name by state. (Note: Not all states require you file a DBA) If you are an LLC, the SBA also has a state by state guide on how to register your LLC.
- Get an EIN (optional) – Technically, you don’t need an Employer Identification Number (EIN) since you can use your social security number with certain business structures. However, I personally prefer not to give out my social security number if I don’t have to. In general, I would recommend getting an EIN for your travel agency. Also, make sure to check in with your tax professional when it’s tax filing time – for certain business structures, you may still file under your SS# even though you have an EIN. Confusing, I know. That’s why you go to the professionals!
- Get a business bank account and credit card set up – Again, you don’t need a business bank account or credit card but you’ll have wished you’d had set one up come tax time. Having separate accounts from the start makes accounting easier and keeping track of business expense write offs. Lastly, if you’re anything beyond a sole proprietor, you want to keep your money separate to reiterate to the IRS that you and your business are separate entities for tax purposes!
- Read our Home Based Travel Agent Resources page – I put together a page with loads of links so you don’t have to scour the web. Here she be, the Home Based Travel Agent Resources page.
Don’t worry if you didn’t do these things yet, it’s not the end of the world but you do need to do them as soon as possible. Once you start your travel agency from home, you’ll have lots of other things needing your attention so laying the groundwork properly as soon as you can is in your best interest.
Signing up with a Host Agency
Signing up with a host agency is an easy process and doesn’t take long. Many host agencies will do a background and/or credit check before you are accepted into their program. Some host agencies require phone interviews.
There are many, many host agencies vying for your business, make sure you’ve done your due diligence and found the best fit for your home based travel agency.
Starting a travel agency from home is surprisingly easy. The difficult part is learning the travel industry and building up your clients. It requires passion, drive, and patience. Having been a host agency director for over 5 years, I can tell you it takes around 2-4 years before most new home based agents feel comfortable with the industry and start to see their businesses take off. Don’t let that scare you, I can also tell you that those agents that had the passion, drive, and patience haven’t looked back since and are living their dream! Check out our post on how much a travel agent makes for more on earning potential.
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Questions? Ask Away.
I’ve worked with thousands of agents looking to start a travel agency from home over the years. Ask your questions in the comments below or drop me a line on Facebook, Twitter, or Google+. The travel industry opens possibilities of traveling to beautiful places to help you do your job better. It’s important to understand you still have to work in the travel industry (boo), you just get to have a lot more fun doing it than most people (yay)!