How to: Set up your own travel agency

How to: Set up your own travel agency

Like thousands of other people, I found myself facing redundancy at the end of last year, with the daunting task of finding a new position.

Having spent 20 years working for various travel agencies, I knew that I wanted to continue working within an industry that still gives me a buzz each morning.

However, with few companies recruiting for senior positions, I decided to plough my life savings and redundancy into setting up a travel agency in my hometown.


Do your financial planning

Most people working within the industry know that margins are slim for retail travel agencies, and that a net profit figure each year of between 1% and 2% would be classed as a very respectable return.

If you’ve worked out what your annual sales and commissions are going to be (going with a worst case scenario) and how you’re going to achieve them, then you need to stack them up against your operating costs for salaries, rent, rates, marketing, IT, etc.

If there’s a profit to be made within the first two to three years of trading, and you’re prepared to do the grafting, then perhaps it’s time to start working on a proper business plan, and consider setting up your own travel agency.


Choosing your trading name

Once you’ve decided this is what you want to do, you need to decide on your trading name, which is what will sit above your door and on your website for many a year to come.

Check on the Companies House website as to which names have been taken, and also search on a web domain name registration site, such as, to ensure you can get your businesses name with a .com or suffix.

When you’ve seen what’s available, get some feedback from friends and relatives – this is an important decision, and one you’ll need to live with forever.

Consider a managed agency or franchise

With cash being a crucial commodity during the first few years of a start-up business, a way of cutting down on your overall costs is to join a managed agency network, or franchise group, such as the Co-operative’s Freedom Travel Group, Hays Travel’s Independence Group, Global, or TTA.

This way, you will avoid bonding costs from the likes of ABTA, ATOL and credit-card merchant services.

For a monthly fee, commonly a percentage of either your turnover or commissions, you will have all of this included, as well as benefits such as your supplier payments being taken care of, the ability to legally dynamically package overseas holidays, and crucially, access to higher commission levels.


Find yourself an accountant

Even if you know your way around a monthly or annual profit and loss account, are comfortable with building a simple cash-flow forecast, or would be confident in filling in your own quarterly VAT return, it’s important to find yourself a good local accountant, who can assist you with all of the above for a monthly fee.

Furthermore, they will prepare and sign off your annual accounts, assist with payroll and PAYE, and give you advice on how to set yourself up in business, while offering guidance on tax, and other financial matters.


Locate a suitable property

Retail space is often costly, but there are deals to be had for start-ups during a recession, so take advantage of the position you find yourself in when searching for premises.

Don’t be pushed into considering a lengthy lease, which some landlords might be looking for, and attempt to negotiate an initial rent-free period.

If a premises has been vacant for some time, then talk to the owner about taking a three or five-year lease, giving you the option to exit if a) your business is going well and you want to move out to a more expensive unit, or b) things haven’t gone to plan, and you decide to wind operations down.

Call on help from friends and family

When starting up on your own, you’ll find everyone you know wants you to succeed, and is more than happy to do whatever they can to help, so take advantage.

We all know someone who’s handy with an electric drill or paint-brush, or people who would happily deliver leaflets, dish out business cards, or recommend a friend to you.


Useful links

  • – offering advice when setting up your own ABTA-bonded independent travel agency.

  • – a ‘must visit’ offering general advice on setting up any new business within the UK.


Sutton Travel managing director Andy TomlinsonAndy Tomlinson is managing director of Sutton Travel in Sutton Coldfield, which launched July 2009 (@suttontravel on Twitter). He has 20 years’ experience working in retail travel for companies such as Harvey World Travel, First Choice Holiday Hypermarket and Co-op Travel.


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