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01 January 2007

One of my resolutions is to start my own small business this year giving themed guided tours of my city. Are any of you business owners? How'd you get started? Any general advice or good links?
Find out if you need a local license.
Get a federal tax ID for State and Federal tracking.
Find a reliable bookkeeper. Doing the paperwork yourself is no fun.
Have fun!
posted by arse_hat 01 January | 17:53
I'm an independent contractor and work when there is work, however I recommend never losing track that your family comes first. I know, it's a cliché that working for yourself means working long hours but if you make it a point to not let work get in the way of your 'life' you will be happier and more satisfied. It might mean letting go of certain jobs because there is no amount of money that can buy back priceless time with those you love.
posted by alteredcarbon 01 January | 18:06
This probably does not apply to you, but do not hire on friends for full-time positions; the occasional temp fill-in is fine, but any longer, and you risk major problems.

Get your business plan together, especially your advertising budget, a primary marketing plan and a couple contingency plans. Build in flexibility everywhere.

Know everything about your product and your competition, and network your business and social contacts.
posted by mischief 01 January | 18:14
I am poised on the brink of changing from an employee to a contractor at my job (same work without all the meetings and extraneous bullshit), but am hesitating because of uncertainty about changes to the department and (potentially) changes to purchasing policies.

The above is just for background, really. My point is - do your sums really carefully and factor in everything you lose by not being an employee. Don't forget things like long service leave, superannuation, sick leave, recreational leave, leave loading etc (some of these may not exist in your country). When I sat down with a spreadsheet and worked out what I needed to bring in to replace my salary (and that of Her Indoors, who will join me in the endeavour), I was quite staggered to see how much extra we would have to earn just to make the equivalent to our salaries when all the extras are counted. Even if you are not currently in employment, factor in all the things that you could have if you were to take a job instead. That doesn't mean that you shouldn't go into business for yourself even if the money is less, but money is important if you want to have food and shelter, so you have to consider it.

Only after you have worked out what the real financial situation is should you consider self-employment. The legal, financial, regulatory stuff you can deal with and there are plenty of people out there to help you in this area (for a price, of course). Get yourself a good (which is not the same as expensive) accountant to get you set up right from the start tax-wise.

The best part is in the obvious - being your own boss. Want to go to the beach (or the kid's school play) instead or working today? Deadlines aside, nobody will stop you. Ironically, this is also the worst part if you are like me - nobody will stop you ;-)

Also, what alteredcarbon and mischief said.
posted by dg 01 January | 18:28
"Build in flexibility everywhere."

Expanding on this, 80% of your ideas will not work. That's normal. If your business model is built on one inflexible notion, and then that notion does not work out, you are sunk.

Keep a clear perspective and be watchful for opportunities. Listen to your business contacts. When someone says (without your prompting), "Why can't I find someone to do ...?", somewhere in that question is an unfilled niche market. Either no one performs that service, or someone does but they are not marketing themselves well.

At first, speak to each of your business contacts once a week. Soon, you will know who to call more often and who to call less. This network is your lifeline, and that works both ways; generally, charge for your time, but the occasional gratis favor also has its payback.
posted by mischief 01 January | 19:31
This is great advice. Just to be clear, what I'm thinking about is not a switch to total self-employment, but a side business, seasonal to boot. I plan to start modestly and take the time to gauge the market and adjust as the idea develops.

I'm a bit nervous about initiating some of the business contacts I need -- I haven't done that sort of thing before -- but since it will focus on local merchants who presumably will appreciate any attention to their own businesses, I'm hoping there will be good interest.

Keep going, though. This is good stuff.
posted by Miko 01 January | 19:43
... since it will focus on local merchants who presumably will appreciate any attention to their own businesses ...

Just remember, kickbacks is not a dirty word in the tourism industry (as long as you don't say it out loud).
posted by dg 01 January | 20:02
This may be tangential, but when I was tourguiding (which is a bit of a misnomer -- I was basically the entire operation in Venice) the single biggest thing I did to get business up was work those connections with hotels. The first winter I worked, I had almost no customers (which means I was not getting paid), so on days when no one showed up for the tour, I spent those three hours making the rounds of the hostels and low-cost hotels, explaining what I was doing, telling them where the tour met every morning, and asking if I could leave a few fliers.

My explanation was quick -- mainly because it had to be in Italian, and when I started my Italian was not all that good -- basically just "I'm giving three-hour walking tours of Venice for English-speaking tourists, to explain the art, history, and architecture of our city. We meet every morning at X time in Y location, they don't have to make reservations in advance, they can just show up. It's a great way for tourists to see all the highlights of the city. Would it be OK to leave some fliers here for your guests?" I wanted to give the people working at the hostels/hotels enough info that if a guest asked, it would jog their memory so they could recommend me, as well as to leave fliers for guests to find on their own.

I did not take kickbacks. I do think they're a dirty word in the tourism industry, even if they're standard. I certainly recommended restaurants and shops and things, but really only those that I personally liked and thought did good work. For places (like mask-making factories) where I'd occasionally want to bring tourists in on private tours, I would simply let the owners know that I had sent tourists their way in the past because I really loved their work, and would love the chance to bring some more people by on a private tour if they didn't mind -- no charge to them, no kickback to me if the tourists bought anything. I just... I've worked in the travel industry too long to have much respect for people who are making money off of fleecing tourists. There's no reason for it, and you immediately lose credibility with your customers if they sense that's what you're doing. And as a guide, your credibility is the most important thing you have.

Right. So, basically, this was a rambly way of saying, "Talk to hotel owners." :)
posted by occhiblu 02 January | 00:38
Oh, and also network with guided tours in other cities, if you can. People who take guided tours in Boston will likely want to take guided tours in NH, will likely want to take guided tours in Chicago, will likely want to take guided tours in SF, etc.; to some extent, there are people who like taking tours and people who don't, and it's not worth trying to target those who don't. If you can network with other guides and all publicize each others' tours, you're directly targeting your demographic.

(Or if there are other places near you that give tours that won't compete with yours -- historic buildings or museums or something -- you can cross-publicize each other, too.)
posted by occhiblu 02 January | 00:42
Last post, I swear.

Really, I used to have stacks of fliers for five or six tours in other cities in my bag, and at the end of my tour I'd ask who was going to Rome, Florence, Germany, Switzerland... and just start pushing fliers on people. Guides in other cities did the same for me. I got a lot of business that way.
posted by occhiblu 02 January | 00:44
Fantastic suggestions. Thanks. How did you determine your pricing, occhi?
posted by Miko 02 January | 01:10
I just wanted to mention that I was very impressed with every aspect of London Walks when I visited London: the website, the tour descriptions, the prices, the tour guides, the customer service.
posted by Rock Steady 02 January | 10:19
I didn't do pricing. The company I worked for was based in Rome, with a full office and several guides, and had been around forever; they expanded into Florence and then Venice, with one person in each of those places, and I took over Venice about a year after it started up there. I think we charged L25,000 for students and L30,000 for adults, which with conversions and such is about $17 and $20, for a three-hour tour. The company in Rome also ran popular student hostels there, and really wanted to appeal to the student crowd, so we aimed for "high enough to be worthwhile, but low enough that hostellers could afford it."

The crowds in Venice were a bit different, though, in that it's expensive and so attracts fewer students, so I ended up with a lot of the Rick Steves crowd -- middle-aged travelers on a budget, but with spending money. (They were awesome.) I suspect we could have raised prices a bit and kept them, but all in all I think it was good -- the students complained the prices were high, but they signed up; the adults exclaimed about what a bargain they were getting, and signed up. I think that's just about where you want to be!

I think, too, you want to be high enough that you seem "professional," whatever that may mean. I think I actually got higher tips (which is really where most of my income was coming from) because the tour prices were high enough that I seemed to be worth paying, if that makes any sense. Even if you don't take tips, you want the tour participants to view you as someone who's worth paying for, and therefore worth listening to.
posted by occhiblu 02 January | 13:49
This is all very helpful, occhiblu. Fortunately, I've done a lot of guiding as part of my museum career, so I feel as though I will come across in a well-spoken, reliable manner once I put in the research on the theme topics. Wish me luck. Your tips are excellent ones -- particularly about marketing through hotels.
posted by Miko 02 January | 14:43
Yeah, from everything you've ever wrote, really, it sounds like you're an excellent guide. It's just getting the business structures up and running to support that, which is a bit of a separate skill (and one that I'm sure you'll have, too).

Most of it's just persistence. For me, it felt like, "OK, I *just* talked to this hotel owner, he's gonna get annoyed at me" but I found it was the hotels that I hit again and again and again (like, once a week for the entire winter) who really came through for me. They started seeing me as a colleague, I think, and someone who was sticking around and really serious about it.

And good luck!!! It sounds like so much fun!!
posted by occhiblu 02 January | 15:08
Yeah, I was being a bit of a smartarse by saying that kickbacks aren't a dirty word, because they really are. I actually think that, if you want to make a long term business from tourism, you should avoid them, but concentrate on building mutually beneficial connections, as occhiblu has noted. Credibility with customers is important, but credibility within the industry is vital, as much of your work will come from references from hotels, hostels etc. If these places think you can be bought, the reputable ones won't want to know you, because the personal connection you develop has a "highest bidder" taint to it.
posted by dg 02 January | 17:39
I heard SCORE mentioned today on Day to Day and thought of you, Miko.

posted by mlis 02 January | 22:42
I figured you were joking, dg, but, well, "letting things go" has never been my strong suit. :-)
posted by occhiblu 03 January | 01:11
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