By Rezdy — 26 Sep 2014

So you’ve been running your tour and activity business for a while now, and you feel that it’s time to expand. But before you jump into it, you need to make sure you do it right.

If you rush into it, or it’s do it in an uncontrolled way, you put your cash flow and your customer satisfaction at risk.

Step 1: Hash out what needs to change

Typical reasons for expansion include;

  • you’re getting more demand;
  • you’re more efficient and so can service more customers;
  • you’ve added new products;
  • you want to take advantage of opportunities in another market; or,
  • you need to bring certain functions in-house.

Whatever it is, you first need to determine what parts of the business you need to expand. Conduct a SWOT analysis of your business first.

Strengths. What gives your business a unique competitive advantage? What do you do exceptionally well? For example, you operate whale watching cruises and your boat has the best viewing deck.

Weaknesses. What activities detract from what you do best? Where can you improve? For example, your lack of booking software means staff spend too much time on admin work, detracting from their ability to service more customers.

Opportunities. Looking at industry trends, are there any opportunities for your business? How are your customers’ spending habits changing? For example, you keep hearing about the need to be mobile-friendly, but your website is not yet optimised for mobile devices.

Threats. Are there any new competitors or laws that pose a threat? For example, a new law limits your ability to take your customers to certain protected areas.

Step 2: Plan out the impact of your expansion

Your business expansion will have a big impact financially and operationally. So plan carefully!

Some excellent tips from SME Toolkit:

Cash flow

It’s important not to expand beyond your financial capacity, and phase your expansion so cash flow isn’t compromised.

You should plan your financial capacity based on a 5 year projection of demand, and allow 10% of capacity over and above that for periods of heavy demand or partial down time.

Operations

Obviously, your expansion will effect your staff. Most tour operators have their guides and drivers on a contract or part-time basis. This is the way to go until you are sure that a full time position is necessary.

With your customers, you should get them excited when you let them know what you’re doing. Tell them about how what you’ve done benefits them, announce the new products and services you’re offering, and run your marketing promotions through as many distribution channels as possible to get the word out.

Step 3: Delegate tasks

When you’re just starting out, it’s normal to be the tour guide, the reservation manager, the accountant, and basically do everything by yourself! But growth is impossible if you continue to do everything.

This is why you need to master the art of delegation:

  • Give staff mission critical tasks that you once did yourself. For example, managing your tour manifest.
  • Give staff tasks you once did better and faster yourself. For example, answering customer inquiries.
  • Train your best staff members and have them train others. For example, training new tour guides.
  • Determine how your time is best spent, don’t just delegate because it’s undone. For example, you are probably always going to be the best person to talk to the accountant or decide on a new hire.
  • Give management teams autonomous decision making and spending authority. For example, you should not micromanage your general manager. Give them the room they need to make decisions on your behalf.

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