Latest / Travel Agency in a Year / Day 158 - Why TAs need to Build Capacity First
Transcript
- Rachel K: Welcome back to the Travel Agency Near Podcast. I'm your host, Rachel K. We are on day 158. Hold on. I added a special day yesterday. Sorry about that. Yesterday's episode was kind of like a one-off. I'm gonna expand. I do that every once in a while. I'm like, well, I need to make this a two-parter. ⁓ so today is 158, and we're gonna talk about the importance of building capacity for. First, before just diving in. And this was something I actually heard a few days ago. I'm like big on the like entrepreneurial podcasting stuff. And I met I named names like in the live QA's for my courses and things. And I'm like, ⁓ you should check this out. You should check this out. And people are I'm like, how do you not listen to this? You're an entrepreneur. They're like, I don't know what you're talking about. ⁓ so this episode was inspired by Alex Ramosi. I've heard there are controversial opinions about the hormoses. I don't have any problem with them at all and in f in fact find they produce a lot of very inspiring content. So inspiring that yours truly listened to one of his like things, episodes that he has, Alex. And decided to take one little thing from it. That I think is very important for travel advisors, the many advisors I've coached and mentored over the years. and it's build capacity first. He says it like at the end of this episode, it's like six principles, da-da-da. And he's like, if you build capacity first, blah, blah, blah, blah, blah. I don't remember what else he said. Sorry, Alex, if you're listening. ⁓ but I was like, that is so true. I mean, the entire episode was fantastic. And it was like six principles to change your life or something when you're starting a new business or you're feeling stuck. And I was like, ⁓ this might have some good little nuggets. If it's not a podcast, it's a book I'm reading about it. Or a sometimes a lot of this stuff comes from like my Bible study, just so you know, it's crazy. I'm giving you all the best advice I can find is what's happening here. ⁓ so build capacity in preparation. Mm. When you first start out You're not booking two hundred thousand dollars a month in trips, right? You have to have the capacity to take on that level of business. If you are doing that, good gracious. How are you doing that? Congratulations. That's amazing. And also, how are you gonna scale from there? So you have to make sure you have the capacity, is what I'm saying. Like two hundred thousand a month in booking, like sales. really isn't a lot depending on what your niche is. If you're doing a lot of like safaris and river cruises, that's like, you know, ten trips a month, whip T D. ⁓ but if you're doing like ocean cruises or all inclusive resorts, that's closer to like a hundred trips. So that number is kind of a not a very good example. But when you first start out, you're you're like, ⁓ I have this passion for travel. I really want to help people plan their vacations. I I hear that I'm not making fun of anybody, I just hear that a lot. I hear that a lot. I plan this trip and I'm really good at it and I want to help others. Like everyone has a really big passion to serve others. That's great. And there needs to be the capacity to serve a certain number of people. And have the skills developed to continue growing in your business. So that's what this episode is about. So with your skills, maybe you have a really good eye for discerning trip advisor reviews. And you're like, ⁓ that resort's gonna be garbagio. Whoops. These are a bunch of paid reviews or this guy's crazy, whatever. maybe that's what it is. But you don't know how to book anything. Like you you kinda know how to book on like Expedia or directly with the hotel, but you don't know how the travel agent side works. So you have to develop that skill first. Then at some point in your life you have to develop the skill of selling because this is sales and marketing. ⁓ and once you're able to actually sell, then you have to market your ability to sell and book these trips. So these are all skills you have to have the capacity for to build on. And I've coached some fantastic advisors who are like, I don't have the capacity for this. This is not how I want to do this. And they're really, really good at ⁓ the selling, maybe not so much the marketing. And then the type of booking that they want to manage isn't they're very, very picky on what they want to do. and because of that, they're hesitant to build the skill of marketing because they're like, I need to make sure this is clearly defined. And that is absolutely that's a good, that's a good way to look at things. Don't procrastinate too long. And also slowly build your skills. You can seize gift degrees, people. You don't have to be perfect at these skills. You just start building. And as you practice it more and more, You cannot be a master of something until you've done it for 10,000 hours. How many hours is 10,000 hours? If you work 40 hours a week, doing just one specific skill like sales or marketing. So forty times fifty two, that's two thousand eighty. So you'd need roughly five years of doing nothing but marketing to say you're a master at marketing. Anyway You wanna have your capacity like capacity in your skills and you want to like slowly build your skills over time. You also want to have the capacity in your cash flow. Make sure you have the money coming in before you make investments. Focus on like just keeping the money. Like building up the reserves. And I'll talk about that in a minute. I found this definition of capacity building from smallbusiness.org, which is in my chicken scratches. It is Capacity building is the process of obtaining, improving, and retaining knowledge or power of an individual or organization to produce, perform, and deploy, sorry, necessary skills, knowledge, tools, and other resources needed to do jobs. ⁓ let me read that again because I was reading my own terrible handwriting. ⁓ the definition of capacity building, the process of obtaining, approv improving and retaining power of an individual or organization to produce, perform or deploy necessary skills, knowledge, tools, and other resources needed to do jobs. ⁓ competently and effectively. That's the other side of the notebook. That's the definition that small business dot org has for capacity building. So you need to have the ability to build capacity as you grow. And like I said, Alex Ramosi says build capacity first. If you don't have the if you're doing this as like a side thing and you like I can never take on more than one client. at a time from start to finish with a trip, you're never gonna have the capacity to scale up. And you can do things like stop doom scrolling so much, stop fighting on social media or commenting on social media so much and start focusing on building those skills to create the capacity. Why? Why do you want to build capacity? That was weird. Sorry. ⁓ more capacity, the more capacity you have creates more opportunities for you to take and invest in. If you don't have the skills or the abilities to do certain things in as a travel advisor, you're gonna miss a lot of opportunities. Okay. ⁓ think about your capacity where you are when you started. versus your five year goal. If you want to start out and just be like, I just want to have enough money for like us to take a vacation as a family once a year and this will be my vacation budget. Cool, you need to make I don't know. I don't know. I honestly don't know how big your family is or what kind of trips you like to do. You need to make about ten to twelve thousand a year on the side. That is very doable. But let's say you get burnt out from your job and you find that you're really passionate about Being a travel advisor and you want to scale it, you have to create more capacity and more skills to scale from that $10,000 a year to $100,000 a year. And then what is your five-year goal? Do you want to be just fine, $100,000 a year? Or do you want to be half a million, million dollars a year? Like everyone's business is different. How they want it to look is different. So, with that being said, there's three stages. Every business is in at some point. And ⁓ let's talk about Business might be. So stage number one, your business exists. You're actually booking stuff. ⁓ like at least a trip, right? You may or may not have an LLC, you have a business checking account. ⁓ so some questions. If you were in this phase, like you just merely exist, can you get enough clients and provide enough service to make this an actual business? So this is like assessing your capacity now and what you're willing to sacrifice in your current life to build the skills and open up for more opportunities. Can I expand my sales base? Do I have enough cash flow to cover demands as I grow? I've been saying this in so many episodes. Please, everyone needs to stop blowing their wads on quote unquote trainings. Don't get me started on them. Please don't do that. Like Even like my trainings, like I have turned I've told people you don't need my trainings. You don't need my trainings. You're fine. Don't spend your money on me. You can do a call with me and save thousands of dollars and I can compare to WikiHow articles turned into fifteen forty-five minute slideshow presentations. Trust me, I've taken the courses. I'm not you're not alone in this. I've taken some of these courses and I'm like, this is a complete waste of money. So I'm very careful about that. All right. But when you are in existence, you are marketed heavily to take all those courses, and then you're like, I don't have the cash flow to grow. And then like, don't worry, we have another solution for ya. No, you don't. You just want their money because You also can't book travel. Anyway, number two is survival. Not all of them. Some of them are I s just be very careful with your courses, with the courses and the investments that you make. Okay? Be very careful. Number two stage is survival. Revenues versus expenses is where you're at. Like you've got cash flow going, but could you survive a COVID? Could you survive a 9-11? Could you survive Could you survive a severe economic downturn? So your questions, do you have a long-term cash reserve? Six to 12 months. I would say as a travel advisor, a long-term cash reserve that's a safe amount of time. I know a lot of like general business financial advisors are like, six months is good. I've been in some situations. I would say 12 months is a safe, safe number to cover all operational expenses and your pay. And you're like, what? Yeah. Yeah. You can get there pretty quickly. Because you can always give yourself a pay cut and you can always cut down on expenses. ⁓ but 12 months. I I would I I'm a fan of the 12 months. ⁓ your cash flow, are you generating enough income to be able to pay yourself and foster your business? and invest in growth in your business. Survival stage is when you start considering the courses. Okay. When you are in the existence phase, that is not a good time to spend thousands of dollars on courses. It's when you're in survival phase, you should really consider maybe I should expand my training and build your skills and your capacity from there. And by then you'll have had enough entrepreneurial experience to make wiser decisions with the courses you're investing in. Number three, success. This is the third stage. ⁓ you are neck you are economically healthy. You have like a year of cash reserves set aside. ⁓ and at this stage, you can decide to keep it exactly at it as is. Like I said at the beginning of this episode, stay stay fine making a hundred a year. You're happy with that. 50, 40 a year, whatever comfortable amount you're with, like that this is like what you're comfortable with. Or you can choose to expand further if you want to do so. However, every single one of these stages you have to assess with these questions, keeping as is or expanding, do you have the capacity to expand? Do you have the capacity to maintain it as is right now? Mm-hmm. Because here's the thing, and I know that sounds like AI. I don't care. Here's the thing. This is 2025 AI. No, I'm just talking from a notebook. what stage is your business currently in? Where is your current capacity? Like those three stages: existence, survival, success. Which one of those stages is your business in right now? And which one of those stages are you in right now? Because your business and you Your business will always align with you eventually. So if your business is in survival mode and you are in existence mode, your vi bus your business is gonna drop. Your thoughts become a reality, people, because you don't have the capacity. Your business is gonna revert to existence level. Like, can I even get clients? If you are in existence mode as a business, but you are in success mode in terms of capacity, which is not common. And k it is possible your business will quickly go into success mode. Okay. And that's usually I've seen that with travel advisors who have been entrepreneurs before in other industries. So they already have an idea of like this is the nightmare I'm dealing with as someone who's self employed and they know how to manage it much faster. So where is your business? And where are you? All right, that was day one fifty eight of the travel agency in your podcast. If you know someone who's like nothing ever works for me. Nothing works out for me. Have them listen to this episode because it's all about how much they can I hate saying capacity. I feel like it's gonna become a it already has become a buzzword this year. But I am don't I can't think of another word for it. Where is that person's capacity? Like, let's reflect on that people. Comment. Comment where you are. Are you in existence, survival, or success? Have a great day and I'll see you tomorrow.