Third in a series about how travel advisors are planning for the future. For more, see A Tale of Three Succession Plans | Travel Research Online and Succession Planning Has Agency Owners Dreaming of a Different Kind of Life | Travel Research Online
Even after 32 years in the business, Vickie Everhart is not yet ready to retire. But after her father succumbed to Alzheimer’s disease and her mom had a stroke, she got to thinking about what would happen to her business—and her customers—if she should fall ill.
“Every decision I make I ask myself, ‘Does someone else need to know about this? Are there procedures in place to care of this in the future?’ ” she says. “For me, it isn’t about retirement; it’s about being prepared for the unknown in your own situation. If I wake up tomorrow incapacitated, I want Krouse Travel to go on without me.”
Everhart says she looks at every new hire and every IC “as someone who can take over part of what I do and help keep things rolling. So slowly, sooner rather than later, we will be able to flip the switch for my departure—and the team will have all have the tools and the knowledge in place.”
While the agency’s CFO is also a partner in the business, she doesn’t aspire to the CEO role. So Everhart is training a team “who would enjoy being the face of the business, doing TV, and print interviews, presenting travel webinars, attending local functions, etc.” When there is a decision to be made, they all are involved “so they can start thinking about decisions through the eyes of a business partner rather than an employee. It’s like doing a really long interview for my replacement.”
As they learn, Everhart is becoming more comfortable taking a step back from those 60- or 70-hour work weeks, and using the time to travel with small groups and learn about new destinations and products for her clients. “If I take a trip, it’s going to be with some friends, maybe 10-15 people,” she says. “I’m not doing 100 people anymore.”
Beyond the internal staff, Everhart has lined up professional resources, including an attorney, an accountant and an insurance agent. In the event of her death, Everhart’s husband and children inherit her shares, but not the role of CEO. “I want to have something in place to protect the people who rely on this business for their livelihood, so it continues running as long as the team wants it to continue,” she says.
When she speaks about succession planning at industry events, Everhart notes that many travel advisors hesitate because of concerns about the costs associated with succession planning. But there are always ways to have a good backup plan that is affordable, regardless of the size of your agency, she says. “It’s important. Really important. It’s a passion of mine because there are so many young agents and it’s something they need to be thinking about. It’s never too early to get started.”
Finding the Perfect Match
Tammy Jones-Deem of TJ’s Travel Inc., meanwhile, is taking a different tack. She already is on a mission to pair up each of her clients with the perfect advisor to replace herself, through her host, Largay Travel Inc.
“This is a very difficult field to exit out of gracefully,” she says. “I’ve got 2.5 years left until I retire, and I’m working now with a third generation of clients, people with whom I have long-lasting relationships, and walking away from them is very difficult.”
She doesn’t have the time or the patience to train a successor, she says, and it’s not really an issue of money; “if I shut the doors tomorrow, my life would still work. But here In the South, it’s all about the feelings – some clients like someone a little more direct, other clients you have to be the social softy. It’s all about the feel-goods. In my heart, of all the options I’ve considered, this is the one I can sleep softly on.”
Already approached by a potential buyer, she just didn’t feel right turning over her friends to a stranger. Instead, she turned to her peers at her host, Largay Travel. “I trust the way they vet people and the moral standards they require, and I have met many of their agents over the years. Now I want to get to know a few extremely well, to put together a small pool of 10 or so Largay agents whom I cherry-pick to match my clients’ personalities. If they keep the clients, we’ll have some type of split commission so I have some residual income.”
Then she is off to a condo in the Blue Ridge Mountains and a catamaran in the BVI.
That’s just how Eric Hrubant got into the business in 2012, when his boss of almost 20 years was ready to retire. Hrubant “was like the bartender buying the bar” when he acquired CIRE Travel, he says, and they shared the commission each month for the next three years. Now at 47 years old, he finds thoughts of his own exit plan—by the age of 60, he hopes—already affecting many of his decisions.
“When I hire, I look for younger people who are interested in making this their life’s work, people who will stay with me, and I train them my way, so they can step into their own when I am ready to retire,” he says.
From among his 11 employees he is looking largely at Esther Klijn, who understands the business side of the house in a way many others do not, and Melissa Chaquea, just in her 20s, who has been so successful in selling cruises that he is giving her increasing responsibility for the cruise side of the business. “Melissa is young and I want her to feel like she has a place here for the long term. So I want to give her her own lane, something she can take ownership of where she doesn’t have to feel like she is number two,” he says. “One day we can have CIRE Travel Corporate and CIRE Travel Leisure and CIRE Travel Cruising.”
In the meantime, he has been careful to keep detailed records of every penny of his business back five years or more, preparing for the day he will be looking for a buyer. He has brief bios of every client, and every month he tracks which clients are booking what and what percent of total sales each one delivers. Now he is on the lookout for agency owners nearing retirement who do the same and want to sell.
“When you buy a business you are not buying a product, you are buying goodwill,” he says. The best way is to find an owner to partner with for three or four years so their clients get to know him and his team, “even if they just cc one of my agents on the emails, to foster a warm handoff, so it’s not shock and awe when I take over.”
He has been disappointed to find that “everyone I speak with has a vision of how much their agency is worth—and yet no one understands their business well enough to put a price on it. No one can give me a historical report showing who exactly their clients are and what they bought over the past three to five years. No one has been able to come to me with a coherent plan.”
Looking at the Big Picture—and Her CRM
That’s exactly the reason to start planning now, says Margie Lenau—and to take a broad view of what you need.
The death of her mother last year started Lenau down the path to succession planning for her agency, Wonderland Family Vacations LLC. But while she was at it, she took a look at the many other ways she could make things easier for her heirs: a living trust, a power of attorney, a health care proxy. And a CRM.
“My thinking is, if I’m going to plan, I’m going to plan everything,” Lenau says. “All my kids are trustees of the estate, listed in the order I want them listed, and I also have a file with names of brokers they can go to value the agency. I think it’s going to go like this: I am a MAST agency, so MAST will help with the sale of the agency. I’m also a shareholder, so MAST will buy back the shares.”
Selling her business to a MAST agency and will help facilitate the sale, or her heirs could sell it through a broker. She will give her granddaughter, who has been working in the business since she was young, first right of refusal to buy the agency at a discounted price. “I feel like she has a vested interest in the business and I want her to have the opportunity to continue it, or sell it, and get some money,” Lenau says. “She graduates in April with a business degree, and I feel like she has put in a lot of time, effort and knowledge and should be able to reap some of the benefits. And I don’t want my kids to argue over it.”
But succession planning really has two parts, she says: beyond filing the legal paperwork, it’s important to make everything the future owners will need easily accessible. Lenau has “a big file with file folders and labels saying, this is for selling the business.”
Inside are directions for transferring passwords, lists of her frequent flyer numbers, the paperwork for the attorney, the papers around her LLC and where the business is licensed. There is contact information for her lawyer, Thomas Carpenter, as well as her CPA, financial advisor, insurance agent. There’s a copy of her household budget and list for the business – her Zoom account, IATA and CLIA information, all the agency expenses. “It’s a lot to keep up with, but I am always adjusting the budget for my business, so I may as well make it easy to access,” she says.
Equally important, she says, is to have a CRM. When she spoke at a recent MAST conference about why you should have a CRM, she was surprised to see that about 20% of the attendees did not have one—a big mistake, in her opinion.
“Once you have a CRM for a while, you can get statistics and reports. You need it to figure out your marketing – all my numbers, my agents, my trips, my fams, my spending. When do passports expire for my clients in 2024? I can go back and run reports on all those things. The reports give us an opportunity to call our clients and remind them about travel. And I do payroll from my CRM, so my granddaughter can access that,” she says.
And when it comes time to sell, “your value is your book of business—and your book is in your CRM. A spreadsheet is not enough—a CRM is not just a list of names, it’s the details of the list. If you don’t have one, how do you determine what your business is worth?”
Cheryl’s 40-year career in journalism is bookended by roles in the travel industry, including Executive Editor of Business Travel News in the 1990s, and recently, Editor in Chief of Travel Market Report and admin of Cheryl Rosen’s Group for Travel Professionals, a news and support group on Facebook. As an independent contractor since retiring from the 9-to-5 to travel more, she has written regular articles about the life and business of travel agents for Luxury Travel Advisor, Travel Agent, and Insider Travel Report. She also writes and edits for professional publications in the financial services, business, and technology sectors.
