This week’s Industry Insider comes from Michael Lavilles, CEO at Beyond Travel Group, who talks about the challenges of growing a business in tight times.
“I took full ownership of my business Beyond Travel in 2014 and before I had barely got my feet under the desk, I wrote down my target in bold letters. Triple revenue to $30 million within 3 years. When I think about it now, this target might seem overly ambitious. Anyone who has worked within the travel industry over the last five years knows that pressure is never far from view.
While I was determined to make my target work, I knew I couldn’t do it without the guidance of those who had succeeded before. I pulled together a new Advisory Board – and was lucky enough to bring on board Peter Irvine, co-founder of Gloria Jean’s Coffees and Tony Gattari, who oversaw the growth of Harvey Norman’s computer business. With their support, I set about establishing a firm plan for growth, involving investments in new marketing approaches, information technology and staff training and incentives.
But it was never going to be plain sailing. Within the travel industry, we face a myriad of issues. We are at the mercy of a fluctuating global economy that can deeply affect our businesses. At Beyond Travel Group we pay suppliers in numerous currencies including the Euro, the US dollar and the Russian ruble. To ensure profitable growth, I needed to have a facility that managed a cyclical cash flow and tight margins across these currencies. My business is focused in the northern hemisphere, so while April to August provides strong cash flow, September to March is leaner. I needed a solution that could help keep my suppliers paid on time and with the minimum of fuss if I was to meet my targets.
Our business is focused around high end tours in Russia, Eastern Europe and Scandinavia. This is a complex collection of countries and a supplier network to match. These suppliers needed to be paid on time, irrespective of fluctuating currency or cash flow. After speaking to American Express, I was told there was a new offering called AccessLine where I could pay my suppliers whether they accepted cards or not. The money would land in their account as a normal transfer, not a card transaction, and it gave me 51 days of breathing space. I also started to use this system for domestic suppliers.
How many incredible businesses have been closed down due to the curse of cash flow? I have worked in finance and travel for many years and I have seen my fair share of incredible companies close down. Their product and people were often excellent, but they were under pressure to pay suppliers and had no other way to do it. Crushed by the demands of suppliers, with no way to pay them on time, they vanished without a trace. Within the travel industry, due to our reliance on foreign partners and the complications this can bring, I have certainly felt this pressure. By utilising a new card payment system, I was able to focus on what I got into this business to do: to grow it.
After writing down my target two years ago, today we are on course to achieve that $30 million turnover. When I took over the business in 2014, I felt that two things were key to success: courage and cash-flow. You have to be courageous, because if you refuse to innovate, your business will stagnate. In terms of cash flow, I have been given the precious gift of time, in this case 51 days, which can make all of the difference in this business.
We are about to expand into Sri Lanka and India and are investing 30 per cent of our gross profit back into training and incentives for our staff. We actually put the reward points we get from making payments through American Express AccessLine, towards travel opportunities for staff. If we invest in our people, I have no doubt that in turn they will help to drive Beyond Travel to even greater heights. Fortune favours the brave, but most of the time in business, it’s a simple case of having a full thought out plan to counteract any instability.”