- The Four Pillars of Efficient Business Travel
- How to do Travel booking for a Small Business: Affordable Travel Management Agents and Digital Solutions
- Small Business Travel Tips and Common Biases: What You May Have Missed
Travel is an effective way for businesses to acquire new clients and investors– nothing is more impactful than meeting face to face with a potential client. Large companies are often well-equipped for traveling; they have a uniform procedure and enough money to support their employees. Yet, for small businesses, travel can become overwhelming and unorganized. The combination of a limited number of employees and an over-ambitious or unrealistic travel plan can put a financial strain on small businesses.
According to Concur Technologies, a travel and expense management company, small businesses spend on average 19.7% more on travel! In order to minimize these expenses, it is vital for small businesses to create efficient expense plans and detailed corporate travel policies. A comprehensive travel plan that focuses on consolidation, compliance, flexibility, and transparency can help your small business travel in a more organized, productive, and cost-effective manner.
The Four Pillars of Efficient Business Travel
Members of small businesses cannot travel efficiently unless they have an accessible and easily-digestible travel plan. This will help those in charge become more aware of how much money can realistically be spent on travels. An accessible plan will also help employees understand what is expected of them during business travels. First and foremost, this requires small businesses to manage their finances through consolidation.
1) Organization: Managing Finances Through Consolidation
It is impossible to manage your small business’ finances without creating an organized system. Sometimes, companies fail to consolidate their financial expenses. Without an understanding of your company’s expenses, it will be difficult to properly allocate your spending across departments. This may result in disorganized and financially-strained company travels. Organizations such as World Travel Service can help you merge all your information into online financial reports. By improving the organization of your company’s finances, you can get a better idea of your company’s net earnings.
A study conducted by the Association of Corporate Travel Executives (ACTE) and Global Business Travel Association (GBTA) found that 51% of surveyed employees (PDF) hope to introduce a “Total Cost of Travel” policy within the next two years. This kind of policy, which helps detail which areas of travel cost the most and how these expenses can be efficiently managed, can be especially useful for small businesses that are struggling financially. By creating an organized and consolidated financial system, your company will become more aware of travel expectations and cost limitations. With this clarity, your business will become more efficient and your employees will work better with one another, like a well-oiled machine.
2) Compliance: Training Your Travelers
The ACTE survey reports that 84% of corporate travel managers believe that saving money will become more about gaining compliance; there will be a “shift in how corporate travel managers approach policy, away from controlling supplier costs and towards managing traveler behaviour.” The more your employees are aware of and understand your company’s travel policy, the more money will be saved.
Unfortunately, in the hopes of finding cheaper prices, employees sometimes stray from their company’s travel policy. In theory, this may not seem problematic; employees may even think they are being helpful. According to a survey conducted in 2013 by Amadeus, a global travel and tourism company, 52% of business travelers had unpaid travel expenses because they did not comply with their company’s travel policy. In reality, a lack of compliance often reveals a lack of understanding. If an employee doesn’t follow your directions, they risk skewing or damaging your company’s savings plan. It is through the compliance of team members that small businesses can carry out their travel plans economically and efficiently. Rather than trying to control the cost of suppliers, companies are shifting their focus towards managing the way their employees follow their travel policy. The focus should not be on “significant savings;” instead, companies should focus on “cost avoidance.” However, compliance is impossible if you don’t create a travel policy that is flexible.
3) Flexibility: Setting up an Achievable Travel Plan
While employee compliance is important, small businesses still need to promote open communication between employee and employer. If your employees voice concerns or point out issues with your travel plan, it is your job to listen to these grievances and recognize when it is beneficial to be flexible. Success requires open communication between employees and the employer; you need to be adaptable and supportive of your frequent travelers if you hope to create an efficient and economical system.
Travel and flexibility go hand-in-hand; it is necessary for small businesses to have an open mindset during every step of the travel process. According to Amadeus’ survey, 51% of business travelers had to make changes (PDF) to their travel plans before departure and 22% had to make three or more changes to their itinerary. With so many last-minute alterations, it is important that small businesses are comfortable with change and willing to make last-minute changes. For example, though mandated policies will give employees a clear set of guidelines and will likely improve productivity, sometimes, it is not realistic for every employee to follow identical guidelines– a member of upper management may have more flexibility on a trip than the other employees. At times, it is important to be flexible with your employees; let mandates turn into guidelines when it is necessary.
Also, if your company’s travel system isn’t working, don’t be afraid to change it! A failing system will only lead to more financial troubles. In small companies, you may be able to get feedback from all travelers about travel policies; it is important to take advantage of this so that you can figure out what is working and what isn’t. Once you have a working system, invest in it– stay committed and make sure everything goes as planned.
4) Transparency: The Importance of Communication
In addition to being open to travel policy improvements, small business employers must remain open with their employees about the purposes of their corporate travel decisions. Initially, your small company may seem to function fine without a clear and detailed travel plan. Many small business owners make the mistake of assuming that, simply because of their small size, their employees have access to and fully understand the company’s travel policy. However, as your business grows, a lack of structure– or the absence of a travel plan altogether– can cause confusion. If you do not have a travel plan that your employees fully understand, things can unravel quickly.
Structure, clarity, and transparency are necessary in order to maintain trustworthy relationships. Unfortunately,
according to the ACTE, 44% of organizations surveyed have no formal system in place for gathering traveler feedback. However, 42% of corporate travel managers wish to set up a traveler group in order to improve communication. Do not underestimate the value of creating a relationship between employees and employers! If all members of the team understand the travel policy, it is easier to create a system that works smoothly. If you do not communicate well with your employees, they may become tired, stressed, or confused. This may cause employees to act unfocused during business trips, which will affect their interactions with potential clients.
Improving Traveler Service
It is a common misconception that it is easy for small businesses to have open and clear lines of communication. In truth, it is often harder for small companies to keep their employees informed– travel policies tend to be too general or open-ended. While bigger businesses usually have a formal travel policy that experienced employees can help reinforce, employees in small companies often do not have a clear understanding of the travel policy, nor do they have the support of a large network of coworkers. Thus, it is easy for employees in small businesses to ignore their company’s travel policy and make their own decisions while en route.
Communication is particularly important during the traveling process itself. Pre, during, and post-trip messaging are good ways to keep travelers up to date. The Concur Messaging communication platform has pre-trip messaging, interactive maps, employee itineraries, destination details, and much more. These tools can provide travelers with information and advice on how to efficiently and productively manage their journeys. Constant communication will help keep business travels organized, while also reminding employees to behave appropriately and stay focused. The commerce-as-a-service company, Deem, also has a corporate travel app that will help book flights, tailor travel policies, and even view airline inventory.
How to do Travel booking for a Small Business: Affordable Travel Management Agents and Digital Solutions
Small businesses have a few options for booking and planning their travels.
However, many companies are becoming stricter with booking; they have chosen specific booking tools that they have found to be the most helpful.
Restrictive travel policies minimize the money spent on planning. It is common for companies to rely on only a few booking tools– even Cognizant recommends that, if your company doesn’t have a problem, you shouldn’t “fix what’s not broken.” Although it is true that you should not dismantle a travel policy that seems to be working, it is always important to explore cheaper options. This does not mean that you should completely reenvision your travel plan– it means that you should try out other travel solutions, rather than simply relying on what is comfortable. Even if your travel policy seems to be working, perhaps it could work even better. If you try out cheaper travel options, you can then tweak your travel policy to accommodate these findings.
1) Travel Agencies
Many small businesses believe that travel agents are too expensive. Yet, according to the New York Times, when the price and service of agents are compared in a study to those of online search engines, the agents come out on top. Journalist Seth Kugel explains how the agents tested were able to suggest “alternate routes, [give] advice on visas and just generally [act], well, more human than their computer counterparts.” Agents can help your small business find unadvertised rates and discounts that search engines cannot. It is important to know how to work around cost restraints when booking flights, hotels, transportation, and more. Travel agencies may give your company the extra help it needs to get started.
Ethan Laub, founder and CEO of TripScanner, suggests that there are three signs that your company should find a travel agent. If your company…
1) Has a complex traveling system
2) Makes frequent last-minute changes to bookings
3) Travels enough to negotiate supplier discounts
…then you may benefit from the help of an agent.
2) Open Booking
Though a travel agent is helpful, many small businesses choose to go a different route. Dave Johnson, a writer for startupnation.com, believes that it is important weigh all your options, rather than automatically choosing a travel agent. Open booking is becoming the preferred travel solution because it allows employees to book their own travels through their preferred platforms– often directly from their smartphones. While travel agencies may “have access to certain types of discounts and packages that… might be harder to find on your own,” Johnson suggests that, if you can devote a little extra time and energy, you may find better prices in-house. Open booking is a convenient travel solution that has the potential to improve visibility while also increasing flexibility and employee freedom. It is simply a matter of weighing the pros and cons and deciding whether your company has the time to find deals itself, or whether outside assistance is necessary.
Open Booking for Small Businesses: The Pros
While it is often difficult for large companies to try out different travel approaches, small companies usually don’t have this problem; it is easier for small businesses to experiment with different approaches. By exploring all the travel options available, your small business can discover what system works best. Open booking gives your employees the freedom to choose how they book their travels. Not only will this increase travel convenience, but it also will help your company discover new travel tools that may benefit your business. This method may also help foster a better team environment by letting employees have some control over how they travel. Rita Visser of GBTA comments that “open booking is giving travelers the opportunity to make other choices” (PDF). Visser believes open booking is perfect for millennials, who usually “don’t want to be told where and what to book.” By giving employees some control over their own travels, the company’s booking system will become more flexible and the small business will have room to grow.
Some also argue that open booking makes managing travel expenses easier. Kathy Kaden, the associate director at Cognizant, comments that open booking allows travelers to “forward itineraries to the managed travel program for a more complete picture of travel spendings” (PDF). Travel receipts can be automatically sent to the employer and thus expense reports can be created without as much hassle. In this way, open booking can help your business consolidate information, no matter how or where employees book their trips. This increase in traveler visibility will allow you to see what your employees are spending and where they are spending it.
Open Booking for Small Businesses: The Cons
When employees were asked what concerns them most about open booking, a survey conducted by Travel and Transport (PDF) found that employees frequently mentioned “traveler tracking and other safety concerns.” Yet, those surveyed ranked these concerns lower than the benefits of open booking, such as the potential savings. Other sources have found that open booking led to a 15 percent to 20 percent increase in prices (PDF), compared to employees booking within their company’s travel policy. This price increase was found to be primarily due to “international corporate discounts.” These special discounts are only available if you book through travel management companies that can negotiate on your behalf.
Travel and Transport’s Michael Kubasik concludes that “‘it’s really too early to decide (PDF) if there are material savings’” from open booking. If you still aren’t sure whether open booking is the right fit for your small business, you can find more valuable information here.
3) Digital Solutions
It is not necessary to rely completely on a travel agency or on in-house decision-making processes. Salesforce.com’s senior manager, Dorian Stonie, comments that they use open booking “just when it makes sense” (PDF); it is important to be flexible and to explore other digital solutions. As an alternative to travel agents and open booking, your small business might consider outsourcing all or part of its processes, using digital travel management solutions for affordable aid. Not all digital travel tools are created equal; some of them are simply mobile apps or websites that can provide travel deals, while others are full-fledged travel and expense management solutions– driven by A.I. or combining A.I. and travel agents. The following list of mobile solutions may help your company. The travel tools you choose will depend on what you want to book and how much assistance you need.
- 30SecondsToFly has created Claire, an SMB travel management digital solution powered by artificial intelligence. Claire books policy compliant trips for staff via free text within seconds while tracking and analysing travel expenses for management. Calculate how much Claire can save you.
- CheapOAir has a travel bot that uses Facebook messenger in order to compile a list of the ten cheapest flights.
- Concur is an online company that provides web travel solutions and manages your business expenses. Concur also provides mobile solutions using TripIt, a travel organizer for individuals.
- Hello Hipmunk is an artificial intelligence travel agent that uses information from your email and calendar in order to find the best travel options available.
- TripScanner is an online travel company that can give your employees the freedom to book through any website, app, or agency. Clients can forward their itinerary to TripScanner, which searches for lower rates until departure. Tripscanner will monitor trip costs, and it will alert you if an employee has booked outside the travel policy.
- Abroaders is a new online travel company that helps with loyalty/reward programs. They can help pick what program is the cheapest and book your travels for you.
- Rocketrip is an online company that provides an in-between approach by combining online booking tools with live help from agents. Employees become partners in order to control costs, and they are rewarded when they are able to reduce expenses. Cost is 10% of savings and is charged only if savings are completed.
Small Business Travel Tips and Common Biases: What You May Have Missed
From booking connecting flights to finding the cheapest mode of travel, there are many ways companies waste money without even realizing it. We have compiled a list of tips below to help your company avoid some common traveling mistakes.
Common Travel Mistakes
- When small businesses book flights, people often miss out on cheaper options because they do not take advantage of connecting flights. When your company is booking a flight, look for connecting flights that fly through your destination. Oftentimes, you can get cheaper flights to less popular destinations. Just encourage travelers to get off at the connecting airport instead of continuing on!
- Many small businesses rely on hotels and similar lodging accommodations, regardless of the length of their travels. These options are often pricey. If your employees need a long-term place to stay, corporate apartments are affordable alternatives for stays ranging from a few weeks to a few months.
- People often forget the significance of carbon emissions during business travels. Aside from the detrimental effects of pollution, carbon emission can affect whether or not a business trip is affordable and what modes of transportation are the cheapest. Runzheimer International has released TrueCPM, which is an algorithm that uses state-specific components in order to calculate how much you spend per mile traveled. Use this algorithm to make sure your small business isn’t wasting money on transportation.
- According to Startup Nation, many small businesses assume that driving and flying commercially are the cheapest travel options. In reality, the price of gas often makes driving more expensive. When it comes to flying, if your company has only a couple dozen employees, it might actually be cheaper to fly on a private plane.
To avoid travel mistakes like these, we recommend our travel policy template, which can help you set up a focused and organized travel policy. Whether you use a travel agent or decide to try another method, these tips will help turn your company into an economical and efficient traveling machine.
Now it is time to decide what approaches work best for you and your business. If you’re interested in seeing if a digital solution is right for you, you can book a demo of our A.I. travel assistant, Claire, with one of our founders right here.