With all the new technology available today for video conferencing, interactive social media, and webinars, you may think that travel is no longer a requirement for starting a small business. You would be wrong. According to a recent industry report on travel spending, small businesses buy 37% more airline tickets than big business travelers, and spend 24% more when on the road.
Yet I still see business plans and funding plans for startups that have minimal or no allocation for travel. A baseline of $3,000 per quarter per potential traveler is the place to start, based on industry averages. Remember that small businesses don’t usually get favorable rate agreements with hotel chains and rental cars, and thus may spend more on the road than big companies.
While the Internet makes the world seem like a small place, it still costs money to travel, and there are still many valid business requirements to hit the road. Here are my top ten reasons why you should plan for significant travel expense in building your small business:
- Your business is small but the geography is large. Small businesses today may be highly specialized, but not highly localized. Through the Internet, it costs no more to deliver your message around the world, versus your local geography. Yet if your service is consulting, for example, real travel is required to deliver the product.
- Sharing your passion for the business live. It’s always valuable to meet new prospect clients face to face, rather than just by phone or email. Nothing beats looking them in the eye, so they can see your passion for your business. The same is true for important vendors, possible strategic partners, and potential investors.
- Speaking gigs help establish your expertise. I’m not talking here about getting on the national speaker circuit, and collecting big fees. I’m talking about volunteering to be on industry panels for visibility, participating in startup weekends for education, and talking to groups of distributors or potential customers on technology trends.
- Startup market research and focus groups. Market research should start in the library, but it better extend into meetings with potential customers in the various geographies and cultures that are part of your market segment. It’s amazing how much more you can learn face-to-face, compared to an analysis of aging statistics alone.
- Trade show and conference participation. Most young businesses with a new product plan to attend as many as ten shows or conferences per year across the country or around the world. Your presence in a booth to meet customers and vendors, and availability as a sponsor, will often keep you a step ahead of your competitors.
- Brand building requires travel time. With all the ads vying to get your customers’ attention, it’s hard to stand out. As an entrepreneur, you are the brand, so your visibility is as important as your product or service. Travel to key groups and participation in worthy causes, such as Habitats For Humanity, are an important marketing investment.
- Business development and strategic partners. Closing a deal with large customers, such as Walmart or Home Depot, will always require travel to negotiate terms and establish your credibility. Equally important to your growth will be new strategic partner relationships with resellers or white label opportunities. Face-to-face time is key.
- Mentoring and shared advisory board opportunities. We all need help from time to time, and some fresh inspiration. For some entrepreneurs, that comes from meetings with a respected mentor, and for others it comes from sharing what you have learned with newer startups and non-profits to help them and build your legacy.
- Networking events with other entrepreneurs. You can learn more from peers about how to run a business than you can from books, and they are much more likely to help you if they know you in person, versus emails and text messages. Every region has its own culture (Silicon Valley, Boston, Austin), so travel is well worth the cost and time.
- Your business team may be small but distributed. It is not uncommon today to see two founders located in two different cities, as well as key employees. Yet, travel is still a better answer than texting when it’s time to resolve a strategic issue. Even in today’s culture, executives need to meet personally with each employee a few times a year.
In addition to all these business reasons for travel, most people find it to be just plain fun (up to a point). It’s still part of the social fabric of our society, so it behooves all of us to find ways of combining business with pleasure whenever possible. You and your team will all be more productive if you recognize the requirements for travel, budget for them, and enjoy the destination.
CEO & Founder ofStartup Professionals, Inc.; Advisory Board Member for multiple startups; ATIF Angels Selection Committee; Entrepreneur in Residence at ASU and Thunderbird School of Global Management.