The possibility of scaling a business is an influential aspect that entrepreneurs starting to develop their idea need to consider. A scalable company assumes the opportunity in which an increase in invested resources leads to a significant increase in output and accelerates the return on investment (Lund & Nielsen, 2018). That is, a scalable business is capable of exponentially increasing the provision of services and making a profit without exponential growth in investments. While my travel business Tru Royalty Travel has the potential to scale, it is crucial to provide the resources and envisage possible obstacles.
Tru Royalty Travel provides services to its customers dealing with booking and other travel needs. The enterprise has an established business model and, using its features, can consider possibilities for scaling. Different scaling patterns exist, such as shifting capital requirements or leveraging partners’ work (Lund & Nielsen, 2018). For the travel agent, the best way is the addition of new distribution channels by finding new customers in new markets. Using the established work processes in the United States, the venture can spread its activities to other English-speaking countries. Such an extension is possible using the Internet, allowing the agent to interact with customers from other countries.
Entering new markets requires overcoming several barriers to meet the highest sales targets. The following are the barriers relevant to Tru Royalty Travel and their possible solutions.
- Barrier 1. Customer loyalty to competitive agencies and suspicion of a new firm.
- Solution. Attracting the attention of potential customers is possible through advertising the venture and its services. After attracting clients, it is necessary to provide them with a high level of services and encourage them to give feedback about their experience.
- Timing and milestones. The key milestone is the development of a marketing strategy for the new market before the start of operations in the new territory. The plan can be developed, agreed upon, and launched within two to three months.
- Barrier 2. Regulatory features, laws, taxes, and similar aspects affect work in a particular territory.
- Solution. Adapting to the regulatory features is possible through their study and taking the necessary measures, which will allow unimpeded operation in the new territory.
- Timing and milestones. Actions include seeking legal advice and registering the necessary documents for the job. Since the company operates via the Internet, it should not face such significant obstacles as businesses that need a physical presence on the territory; therefore, the preparation time is not long – two months.
- Barrier 3. Understanding clients from other countries and cultures.
- Solution. The agency needs to study the target audience, its interests, communication features, and travel needs.
- Timing and milestones. Studying the target audience is part of preparing the marketing plan, the time for which is two to three months.
- Barrier 4. Time difference due to time zones.
- Solution. Automated query responses can be used to work with clients from other time zones (Hardy, 2020). Since customers may also require telephone advice, hiring an additional employee to work on another shift is also part of the solution.
- Timing and milestones. Organizing technical capabilities to work with other zones will take about two weeks. Searching, hiring, and training employees will take about one to two months.
- Barrier 5. Restrictions due to COVID-19.
- Solution. Finding safe travel routes and informing customers of restrictions will ensure health support and compliance with regulations.
- Timing and milestones. Organizing new trips and informing customers is necessary after starting work.
Scaling a business requires resources and investment from an entrepreneur. Some tasks that do not need continuous work, like creating a marketing plan and configuring technologies, can be outsourced. When increasing sales of services over several time zones, two additional employees who can work remotely should be hired – three employees will be able to ensure constant operation of the venture. The necessary technologies include the presence of gadgets and the Internet, a phone, and advertising support. These measures will require financial investments from Tru Royalty Travel. In particular, the average cost of hiring employees is $4,000, which includes the work of a recruiter, employee training, and other expenses (Vasconcellos, 2022). Creating a marketing plan for a small business costs from $2,000 to $4,000 (Alfonso, 2020). Finally, the price of digital marketing for such a business starts at $2,500 (“Digital marketing pricing,” 2022). Thus, the required starting capital to expand the company is about $12,500.
My technology for exponential business scaling is running a social media campaign to attract customers. Social media allows businesses to establish contact with the audience, and with the simplicity of the approach, it is pretty compelling (Chatterjee & Kar, 2020). However, it is worth considering that spreading negative and fake reviews in such conditions is easier, and the campaign requires constant work. On the three most popular platforms, Facebook, Instagram, and Twitter, advertising costs range from $200 to $1,500 per month (“How much,” 2022). Social media profiles were created on each platform to conduct the company.
Profiles
- Twitter: @truroyaltytvl
References
Alfonso, R. (2020). The real cost of creating a marketing strategy and five factors that drive up the price. 8 Signal.
Chatterjee, S., & Kar, A. K. (2020). Why do small and medium enterprises use social media marketing and what is the impact: Empirical insights from India. International Journal of Information Management, 53, 1-13.
Digital marketing pricing: How much does digital marketing cost in 2022? (2022). Web FX.
Hardy, M. (2020). How to expand your tour operator business into new markets with horizontal and vertical scaling. 10x Tourism.
How much does social media advertising cost in 2022? (2022). Web FX.
Lund, M., & Nielsen, C. (2018). The concept of business model scalability. Journal of Business Models, 6(1), 1-18.
Vasconcellos, E. (2022). What does it cost to hire an employee? Business News Daily.