Cracking Travel Agencies Acquisition Code

Acquisition is the fastest way to penetrate a market, minimize stress on employees and systems. Also, it improves operational efficiency to both “repay acquisition costs” and achieve higher operating profits while enhancing profitability by eliminating the competition.Successful acquisitions lie with the identification of the right targets and planned integration of the two businesses. American Express, Carlson-Wanoglit, BCD and AAA have long used acquisition as the preferred method of sale growth because a well done acquisition is more cost effective and financially beneficial to the acquirer than internal sales growth.

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Acquisition Steps:
o Make sure acquisition fits into your overall strategy
o Qualify of acquisition targets
o Data requirements
o Offer componentsStrategy:
o Reposition your business to become a dominant player in vacation packages
o Expand your company’s reach through multiple owned channels
o Improve operating efficiencies to increase existing business profitability
o Enhance your brand
o Meet stakeholder requirements for profitabilityTarget:
o Fit with your preferred supplier portfolio
o Quality of management/staff
o Ability to improve scale/achieve operational efficiencies
o Less than three years on leaseo Three years of externally prepared financial statements, including sales by major category
o Break-out of owner’s compensation included in financial statements
o Recent 12 month productivity report by agent
o Written summary of current lease terms

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Offer:
o Seller assumes all liabilities prior to purchase date
o Purchase price will be a % of adjusted revenue for the 12 month period following the sale
o Purchase price will be a ?X multiple of the most recent adjusted earning based on:
o Growth in cruise/tour sales
o Cruise/tour of total business
o Physical condition of locationIt’s a buyer’s market now for travel agencies. Travel business consultants such as Travel Business CPR will also investigate and negotiate on your behalf.

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