How to Start a Tour Company

Part 1 - How to start a Tour Company business - Background

Tour guide services are most often offered in cities large, world-famous cities and cities that have rich historical backgrounds. Guests can be taken on a tour by foot or by vehicle, depending upon the distance that will be covered during the tour.

Our guide is in 3 parts:

• Part 1 - How to start a Tour Guide business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a tour company?

Unlike many start-up businesses, your tour guide business will require very little starting capital. Many owners start out running the business out of their home, investing in a small storefront or kiosk in the heart of the city, as revenue starts to come in. Those who choose this path report start-up costs of under $2,000.

A few items you’ll need to figure into your budget are:

• Computer

• Scheduling software

• Website

• Marketing materials – business cards and pamphlets

• Insurance

If you plan to offer tours that transport customers from one site to another, a vehicle should be factored into your budget. Options include vans, trolleys, bicycles, and scooters.

What are the ongoing expenses for a tour company?

Until you invest in a workspace, ongoing expenses will be minimal. Payroll will represent the greatest portion of your budget and will vary depending upon the number of guides you employ. If you transport guests, vehicle maintenance and fuel costs should also be considered.

Who is the target market?

While you might get an occasional local customer, the bulk of your business will come from travelers visiting your area on vacation or from students on educational trips.

How does a tour company make money?

A tour guide business makes money from each tour given. Guests are typically charged at a group rate or per individual. The price of each tour also depends on the length of each tour.

How much can you charge customers?

Unless your tours offer a unique experience that others cannot, pricing is a critical component to your organization’s success. Keep pricing competitive with others in your area that offer similar tours. Pricing is defined by a number of factors, including: walking or driving tour, destinations and entry costs, and number of people in each party. Half-day tours average $125, while full-day tours average $200, plus the cost of admission to any attractions that you will tour. Align yourself with management at each attraction to ensure affordable entry and maximize profits.

How much profit can a tour company make?

While this can be a very profitable business, experienced owners caution against expanding too quickly. When a tour isn’t fully booked, it can eat into your profits. Each tour that you offer comes with its own set of costs; however, with a properly designed marketing strategy, your tour guide business stands to draw in a considerable profit in the first year.

How can you make your business more profitable?

Try implementing some of the below strategies to maximize profits:

• If you live in an area that offers a variety of sightseeing activities, consider expanding to a full-service business. Offer packages that include: hotel accommodations, meals, travel arrangements, sightseeing arrangements, and information for downtime.

• Offer packages that include two or more of your local tours.

• Research all that your community has to offer. This will help in designing creative, unique tours that will give your customers an unforgettable experience.

Day-to-Day and Growth

What happens during a typical day at a tour company?

In addition to the standard administrative tasks that go with running a business, your day-to-day tasks will include:

• Answering emails and phone calls from current and potential customers

• Scheduling tours

• Fostering relationships with those in the community whose interests you share

• Routinely maintaining vehicles if you transport customers

• Checking in with any staff members who might have questions

• Interacting with customers, taking them on scheduled tours, and answering questions

• Brainstorming and planning new tour ideas

• Maintaining a presence within the community

• Building on your marketing strategy

As your business starts to grow, you’ll want to add different tours and services. Tour guides should interact with customers regularly, gathering feedback and listening to any suggestions they might have. For long-term success you’ll want to continuously evolve your business, coming up with innovative ways to entertain guests.

What are some skills and experiences that will help you build a successful tour company?

While this profession does not require any professional qualifications to get started, there is a high level of skill necessary for success. Whether marketing, scheduling, or guiding, a majority of your time will be spent with people. Thus, it’s critical that you’re skilled at connecting with people. You’ll be guiding individuals from a variety of different backgrounds, so it is important that you make each of them feel comfortable and welcome on your tours.

Your city’s history and entertainment is what connects you to your customers. Those who are most successful are passionate about their city, and they strive to continue learning more about it so they can share their knowledge with others. They have a knack for finding and presenting interesting, little-known facts, and they have a way of making even the most boring subject sound interesting. To remain relevant in the industry, it’s also important that you maintain a certain level of awareness of emerging trends.

When interacting with a large group of people, as tour guides often do, emergencies are bound to happen. You should be able to handle such situations with ease while always maintaining an air of professionalism.

There are a number of companies that offer the training necessary to set your business up for success.

What is the growth potential for a tour company?

As the growth rate in the tour guide industry nears 21.2%, tour guides are poised to be one of the fastest growing industries. Your business’ success will rely on the tourist attractions your area has to offer and your ability to creatively maximize the number of attractions you are able to cover in each tour.

What are some insider tips for jump starting a tour company?

Successful tour guide owners offer the following advice:

• Before getting started, contact your local agencies to identify any rules and regulations specific to your industry.

• One of the biggest challenges you’ll have in the beginning is tour scheduling. Research other companies’ schedules when creating yours, taking into account variations in location, time of day, tour length, etc. It can help to give several practice tours before committing yourself to starting a tour guide business.

• Offer a variety of tours that appeal to the different types of people you’ll encounter.

• When first starting out, don’t try to do too much. Offer a few tours and use that time to feel out your customers, identifying what other parts of the city might interest them most.

How and when to build a team

As the business starts to grow, it’s time to start building your team. Each team member must be able easily to walk the scheduled route, on their feet for much of the day. Scripts should be memorized, but your guides should also have the ability to go off script, answering questions, adding appropriate jokes, etc. An older guide is often more well-received, as guests are under the impression that they have more experience in the area.

Part 2 - Is a Tour Company business the right fit for you?

Part 3 - Action plan to launch your Tour Company business in 90 days