Brian Jewell (00:00.716)
If you're putting together a group outing in Myrtle Beach, Skywheel Myrtle Beach has something everyone will love. Take your group soaring above the ocean on the iconic Skywheel with the best scenic views in Myrtle Beach. You get your own private gondola, incredible beachfront views, and an experience that's fun for all ages. And the best part? Group tickets start at just $9.99.

Which for a premier oceanfront attraction is hard to beat. Skywheel Myrtle Beach makes planning easy with free bus parking, buffet options available, and complimentary admission for tour escorts and drivers. So whether you're planning a student trip, church group, senior outing, or motor coach tour, Skywheel Myrtle Beach is an easy crowd pleaser right in the heart of the boardwalk. Book your group today at Skywheel MB.com.

dot com

Brian Jewell (01:05.966)
Hey there, everybody. Welcome to Gather and Go, the podcast that helps you plan, promote, and lead better trips. I'm Brian Jewell. I am your host. I am feeling empowered today. And I hope after listening to this episode, you will feel the same. You know, as always, my promise to you is that I'm gonna do everything I can to make this investment of your time worth your while. And today I'm gonna do that.

Through a featured conversation with Bob Sweeney and Doug Haugen of Innovative Travel Acquisitions. Bob and Doug are going to help us unpack what it looks like to sell a tour company. They're going to share some thoughts on how you know when it's time to list your travel business for sale, and how to figure out what your company is worth. All this and much more really valuable insight.

In the featured conversation I am excited for you to hear it. Before we get there though, let's start with some travel news you may have missed.

Southwest Airlines says long-haul flights could be coming soon. Southwest leadership says the company could begin offering long-haul international flights within the next five years, marking a significant shift for a carrier that has traditionally focused on domestic and short-haul routes. Southwest CEO Bob Jordan recently told employees that the airline's fleet of Boeing 737 MAX aircraft could eventually make destinations in Europe possible.

Particularly from airports along the east coast of the United States. Jordan said many Southwest customers, quote, want to fly the airline they love, but they want to choose us and simply can't because we don't offer them the thing that they want, like flying long haul. The airline is reportedly considering between eight and twelve long-haul destinations and may eventually introduce premium offerings such as first-class seating and airport lounges for those flights.

Brian Jewell (03:14.744)
Comments come as Southwest continues making broader changes to its business model, including introducing assigned seating, premium seating options, and overnight red-eye flights.

Well, before we move on, I want to take just a minute and share a little bit of news from us. Now, if you're like some of our listeners, you book all kinds of travel, not just group travel, and you might have clients that rely on you for helping them book and plan meetings and events. If that is you, I have a great resource to tell you about. It's called Small Market Meetings. It is one of the magazines that we

Publish here and this magazine and its accompanying digital platforms and brands could be really, really helpful for you in elevating your meetings game. Now, every issue of the magazine covers meeting destinations all around the US that are perfectly situated to offer great venues and service to small and mid-sized groups. Now you can

look at the magazine, see some of our content, get a sneak peek at what is in some of our newsletters, download free resources, all of those things on our Start Here page. That is easy to find at smallmarketmeetings.com slash start. And don't worry, I'm gonna put a link to that in the show notes to make it easy for you to find. If you are planning meetings or maybe even just

interested in learning about meetings and perhaps expanding your business into meeting planning, this is a resource you are going to love. And the best part is like everything else we offer, Small Market Meetings is totally free. So check it out today at smallmarketmeetings.com slash start.

Brian Jewell (05:13.922)
Well, it's just about time for us to move into our featured conversation with Bob Sweeney and Doug Haugen. Before we do, let me remind you that you can find a wrap-up of some of the most important things Bob and Doug had to say in the show notes for this episode. And I'm also going to come back after the end of the interview and hit some of the highlights of that conversation, give you some of my thoughts on it just to make sure.

You don't miss any of the real key value in this very important discussion. And when we're done with that wrap-up, I hope you will stick around because I'm going to give you some of my thoughts about what Boomer tour operators need to be hearing about their businesses today. That's going to be the topic of the hot minute. You won't want to miss it. We'll be right back.

With Bob Sweeney and Doug Haugan.

Brian Jewell (06:22.798)
Alright, everybody, my guests today have a combined 60 years experience helping people buy and sell travel companies. After spending the 1980s on Wall Street in 1991, Bob Sweeney founded Innovative Travel Acquisitions, where he and his team work with tourism entrepreneurs to navigate confidential and strategic exits, mergers, and other growth opportunities.

Several years later, he was joined by Doug Haugen, a sales pro who specializes in connecting travel company buyers and sellers. Bob and Doug, welcome to the podcast. Hello.

Doug Haugen (06:57.038)
It's good to be here.

Bob Sweeney (06:58.616)
Thank you, Brian.

Brian Jewell (07:00.174)
Yeah, I'm so excited to have you both. Bob, tell me how you got into the business of helping people buy and sell travel companies, because I don't think that's something you can get a degree for in college. So how did you develop this expertise?

Bob Sweeney (07:14.222)
gosh. I I was a stockbroker for nine years and one of my clients owned a general business brokerage firm and I went and worked there for about six months and I learned a little bit about the overall industry of brokering businesses, but in particular, I was on duty and a travel agency owner called in and I was amazed every

Phone call I made after that would they be in, you know, to other agencies, would they be interested in buying? And they're all interested. So kind of a light bulb went off. And I said, I I I want to specialize in this in this industry. And it's been great. We've been doing it for 35 plus years now. And yeah, we've sold, I don't know, 780 or so travel companies. And it's it's wonderful. Dougie's been my partner.

Twenty seven years now, I guess. So yeah, it's all we do. We stay in one industry. So we if you wanna sell a hardware store or you know, gas station or daycare center, we can't help you. But we can help you if you wanna sell a travel or tour related company.

Brian Jewell (08:31.766)
I love that. You know, you d you developed such an expertise. And a lot of people I think would be surprised that there are 700 tour and travel, you know, companies in the world today. Of course, there's this persistent myth that the travel agencies died 20 years ago, which we all know is not true. but yeah, there's something wonderful about staying in your lane, developing deep expertise and really, really serving the people that are gonna count on you. Doug, can you walk us through some of the signs?

that a founder or an owner of a travel company should probably think about selling. What are the things that are gonna be going on in their personal life or in the professional life that should sort of raise that flag in their minds that it's time to think about an exit?

Doug Haugen (09:15.244)
Yeah, I just g was just speaking to somebody before we started this and they you know, they gave me like four things that there's like all these boxes were getting checked and one was just the minutiae. It's been twenty, thirty, forty years of doing this. something new, or battling the same thing, y whether it's suppliers or

or having to hire a new employee and train somebody, they they get burned out in that sense. And then a big one is that they find that they're competing against everybody i in a way they've never had to compete. And and so, you know, whether that's they've they've lost out in the the the marketing, the search engine optimization through Google, or they've just their clients are going somewhere and they don't know why.

AI, so they see themselves falling behind. And and so in order to save what they got, it you know, and they do have something of value, they wanna they wanna, you know, see what we can do to help find a buyer that could come in and that's already has the marketing tools, the technology to help them to to stay alive and survive.

Brian Jewell (10:37.794)
Yeah. So, you know, you you mentioned that. It makes me wonder if in many of those cases it's a situation where if if the owner tried to stick it out, tried to do it themselves, they would run it into the ground. And so it's really necessary to make a call that may not be the easiest call, but go ahead and make it now versus regret it five years later. Do you see a lot of that?

Doug Haugen (11:02.552)
Yeah, and and they and and there you know, a buyer will say, Boy, you've only made so much money in the last two, three years. Why is that? And they're like, I don't have the time, A. And B, I do have some money, but I don't feel like reinvesting it because I I either don't have the the fire in the belly or I'm fearful. I just I can't I think it's it would be a w I might waste my money tr

just trying to invest it to to grow it to take it to the next level

Brian Jewell (11:35.918)
Yeah, that that makes a lot of sense. Bob, I have met a lot of tour operators. That's the the water I kind of swim in. a lot of tour operators who are reaching an age where, you know, they're starting to think about selling, but they don't have a buyer clear and present in their minds. There's no one who has come up through the ranks of the company. They don't have a child who's interested in getting into the business. Is that something

That you see as a common issue, and and if it is, I wonder if you have some insight into what causes that issue for travel entrepreneurs.

Bob Sweeney (12:11.336)
yeah, it is common for sure. And you know, many owners of tour operators in an ideal world would love to sell their business to one of their longtime loyal employees. It most cases, with all those great intentions, it's unusual that the employee

Can in fact afford to pay the seller a fair purchase price. And there are so many different ways to structure a transaction. And I think sometimes owners, I it's a wonderful, it's a noble idea to sell it to an employee. But if the business is worth, let's say, $300,000 and the most the employee can pay you is $100,000.

I think what you have to realize is that you've provided that employee all along the way a really nice place to work and a good environment. You help pay tuition bills and doctor bills of the family, and you wrote checks every two weeks, and you've done a lot for that person already. So unless the seller is independently wealthy and it doesn't matter if they get a hundred or if they get three hundred, well, in those cases they could they they sell it to the employee.

depending upon the age of the seller, you can structure something where the employee pays them out over ten years instead of the normal two or three years. So yeah, there are ways to do it and and and it's great. I think a way to maybe prevent that from happening would be exploring the employee owned structure, ESOP employee stock option program. That

That's one way to alleviate that future problem.

Brian Jewell (14:16.034)
Yeah, I've I've seen that work before. I'm a big fan of companies that have figured out how to do the employee-owned acquisition. It tends to work out well for a lot of people. So Doug, tell us about the process. if somebody decides I don't have a buyer in my world and I need, you know, Doug and Bob to help me sell this company, tell me about the process, what it's like to work with you guys. And specifically, like, how are you gonna find that buyer?

because i that's not a you know something you can just Google. Like who wants to buy a travel company, right? So so how do you how do you match these these buyers and sellers up?

Doug Haugen (14:52.78)
Yep. Well, the fact that for all these decades that we've what we do is we stay in touch with we try to with most everybody. And we find out, you know, who's growing, who's holding, who's buying, and we segregate those out accordingly so that we have our database of buyers, potential buyers, in categorized, whether you're an adventure tour operator or a a a cruise or

corporate agency buyer. so that that's typically so most buyers of some you know, if somebody sells their travel company, odds are the buyer is in the travel industry themselves.

Brian Jewell (15:38.218)
Interesting. So is it common, Doug, is it common for you to sell to companies over and over again, like people who are just in acquisition mode and and want to take any opportunity they can find?

Doug Haugen (15:54.018)
Yep. I had a Zoom today and the buyer that was looking at my client, I said, Boy, we've sold six to you and he corrected me, he said thirteen. And and I said, Wow, so w so it does it's it's not everybody all the buyers in our in our world, you know, have bought three, four, five, six, you know, I wish that were the case, but but yeah, there's repeat buyers for sure.

But mo you know, most of the buyers will, you know, buy, you know, two, three, four over the course of say several years, ten years, five year you know, fifteen years. And and that, you know, they don't need to grow too much, but it's not it's you know, it's it's easier said than done being a buyer, you know, as well.

Brian Jewell (16:41.944)
Yeah, for all kinds of reasons. So, Bob, about these buyers, are these just random people in the business world who got some cash and thought I'd like to be in travel, or are these people who already have some travel expertise or somehow kind of fit a a a certain kind of profile that we would recognize?

Bob Sweeney (17:00.48)
again, like Doug said, most of our transactions are business to business. And you know, we we do run into new entrants. Seems like a lot of young freshly minted MBAs gather family money, friends money, and they want to buy a business.

the travel business, the tourism business, it's it's attractive by nature to somebody. But I'd say most of our stuff is definitely business to business. And to further what Doug was saying, it it it's really like a dating service here. If somebody wants a corporate agency in the Midwest, it's like

Somebody wants to meet someone who is six feet two and has blonde hair and same thing. We do the same thing. We match, you know, the database is segregated amongst buyers and sellers. And not to say that some people don't sit on top of the fence and said they're open to either one. Some very smart, astute business people are that way. We're we're open to buy and we're open to sell. many times Doug and I will reach out and

Just as politely as possible, want to inquire if they sell, you know, if if the person who owns the business might be open-minded to the possibility of selling their company in the next year or two. And some people get offended by that. Like, we're doing great. We're doing fine. Well, well, Doug or I didn't intimate otherwise. Right. But that's that's what we're looking for. We're looking for successful, mature companies.

And the best reason for a sale is age. When they get to be 64 years old or 63 or 67 or whenever they're two years away from wanting to retire, that's the best time to sell the business. And you know, there's a number of other reasons why sales have to occur. birth, death, health, sickness, spousal transfer.

Bob Sweeney (19:16.974)
You know, there's there's several reasons. but the best reason is because they've done it for twenty five years and they're sixty four years old and they only want to work for two more years. That's the best time to get in touch with us.

Brian Jewell (19:29.682)
Yeah. Okay. So since you mentioned that, Bob, how does it change the experience when it's not the founder, but the founder has passed unexpectedly and it's the founder's estate, it's the founder's heirs, it's or maybe some, you know, in an unfortunate bankruptcy situation, maybe it's you know, someone who has acquired the assets. How does that really change the fundamentals of the sale? Does it make it harder when it's not the owner? It's the owner's kids who are trying to sell it?

Bob Sweeney (19:58.102)
Not really. unless the kids were involved in the business. But if they weren't, they're they rely on the you know, experts, the travel industry attorneys, folks like ourselves, CPAs to but the evaluation of the company and what have you, it doesn't change.

Brian Jewell (20:18.264)
So one of the tough things in my mind about travel company transactions is they tend to have so little in the way of hard assets, right? It's not there's usually not real estate, there's not inventory, there's not patents. So how do you go about figuring out a valuation for a business that has very little, if any, hard assets?

Bob Sweeney (20:42.806)
It's great question. And I I make the comparison. It's not like selling a trucking company where I'm the buyer, you're the seller. Hey Brian, let's go out and kick a few tires around. All right. Well, this truck's worth this one. It's got this many miles on it. You're right. Those are hard assets. They're tangible. It you can go to the bank and get a loan on those. Very difficult to get a loan at the bank because Brian, you know a lot of people.

Brian Jewell (21:07.721)
Right.

Bob Sweeney (21:09.482)
It it doesn't translate very well. So it is, it is difficult. But there's a term called EBITDA, which is capital letters, E-B I T D A, and that stands for earnings before interest, taxes, depreciation, and amortization. It's a multiple of that number that drives the purchase price. And that multiple expands as the level of profits goes higher. That level of

The multiple of that of the earnings of the company that gets paid. Typically it's anywhere from two to six times earnings. The level of profits as they expand, the multiple expands. So someone who's showing $100,000 in earnings, they're probably gonna get two, two and a half times that number.

Someone who's showing a million dollars in net profit, they're gonna get over five million. So the number expands from two to six. I would say if the business is in the half a million dollar profit range, about four times earnings is a good place to start with that. And that's a number that is used. That's not to say that a break-even type travel or tour company.

Has zero value, but the buyers are trying to figure out if things stay the same, how long will it take them to pay it back? That's what they look for typically. So because there are no hard assets, a typical structure, Brian, would be I'm gonna give you a small down payment, and then we're gonna ride side by side for the next 24 months. And based upon what comes in the door here, we'll have a formula put together that.

Hopefully it is satisfactory to both of us. So the risk has to be shared. the buyer does not want a hot potato.

Brian Jewell (23:15.864)
Hmm. What what are some of the signs that there is risk there, that it might be a hot potato? is there something you look for in the balance sheet or something that says, you you may need to do this based on future earnings and not, you know, a a a big multiple?

Bob Sweeney (23:34.978)
Yeah, I mean a precipitous drop in earnings right recently or during the negotiation. that's certainly not good. It's yeah, I mean you want to sell into strength, not into weakness. If you just had your, you know, your top employee just walked out unexpectedly. You know, if you're chasing money, you know, it's not a hundred percent credit card business. I mean, these are some of the things that can get in the way for sure.

Brian Jewell (24:04.75)
Doug, what are some of the hurdles that can make acquisitions harder? You know, I I know the the ideal deal goes through a certain way and the buyer's happy and the seller's happy and you're like, great, this was easy. I imagine that doesn't happen some of the time or even most of the time. So what are the pitfalls that you're walking buyers and sellers through, you know, or are around to to make the transaction successful?

Doug Haugen (24:27.704)
Sure. you know, we try to at the very beginning get as much detailed information on our sellers, on our clients as possible. And what can happen is is that it's just not clear enough for a buyer how how the qu how the agency works, how the tour operator works, their structure. and you know

And I you know a big pitfall would be where, you know, this this the owner is the face of the business. there you know, yeah, I'm I'm sorry there's just a lot of echo cancellations going on in my let's see.

The some more of the pitfalls would be where, you know, a seller's clients, they're top heavy in their clients and and then they're trying to maximize a real high down payment for their business. And the buyer is like, Well, you have a lot of your businesses tied up into just a few clients, and if they one or two of them leaves, you know, we're gonna have to

structure your business this way. That can be a, you know, a sore spot. and you know, the owner being most of the business or the face of the business and not wanting to stay very long. So the transition is a lot more riskier for the buyer. So that could be you know sales are up and down and

because of maybe some programs that a seller has that that's every other year. the unwillingness of a seller to do an earnout or a performance. And and many times having an earnout or a performance can be a good thing s because y you can capitalize, especially if you do a four year earnout or a three year earnout, you're gonna ki maximize your your

Doug Haugen (26:45.506)
your payment structures because, you know, your business chimed in with a a a group that you were doing every so often that came in.

Brian Jewell (26:55.116)
Yeah. Explain that term earnout for people that aren't familiar.

Doug Haugen (26:59.118)
Sure, it's basically, you know, the seller's business is paying for the the balance. The you know, so like if you add a purchase price of a half a million and you got two hundred and fifty thousand cash down and the balance was an earnout, that's two hundred and fifty thousand. It's gonna be on future revenue that the company is going that the company makes going forward.

And a percentage of that revenue is is paid to the seller and that's the earnout.

Brian Jewell (27:32.834)
Yeah, that makes sense. So, Bob, for that founder who started the company, what's the best case scenario for them post sale? do you like to see them structure the deal so they continue working for the company? Is it advantageous if they just make a clean break? Is it really just, you know, person by person, case by case?

Bob Sweeney (27:54.526)
the last thing you said is the case by case. I would say the majority of the time, people, buyers want the seller to stay in the business for at least one year after the sale. The reason that some buyers, the exceptions to that, do not want the seller to stay around is because they've

They've encountered where the employees of the operation will go to the previous owner to ask for an extra three days off for vacation. And that doesn't work well for some people. So the best scenario for the seller is why'd they get into the business? And in most cases, it's to create dreams, really over the top great vacations for people.

Not for all the administration work. You know, the copia broke, the credit card's not working. I mean, that's not why they got into it. So the ideal scenario is the guy who got into it built himself a nice company, and he or she are producing and they have other hard workers around them and

They sell the business and they only do whatever it is they want to do in that organization. They're not involved with hiring and firing or employee headaches. Those are the biggest headaches that we hear. It's the employees are driving me nuts. That's what we hear. Yeah. And if they if they can alleviate themselves of that issue.

And just go out and do what they do best. They make more money as an employee than they did when they were running the place. I've seen that happen several times. So it's it's a wonderful time. And you can it if someone wants to buy your business, you can name your schedule during that one year or for the next five years. If they want your business and you say, well, listen, my wife's a school teacher, so can I have the summers off? Absolutely.

Bob Sweeney (30:14.208)
Sure, why not? I don't want to work Mondays or Fridays. That's great, no problem. So it's a wonderful time to take your foot off the gas pedal and just kind of ease it back a little and say, you know what? I do one golf group each year. That's all I want to do. I just want to lead that golf group from now on. And that's what they wind up doing. Yeah. So they can carve out whatever it is they want.

Brian Jewell (30:38.222)
Yeah, that sounds wonderful. So so Doug, take us through the process. you know, the person who is starting to think about an exit, take us through the process of working with you and your group to facilitate a deal. What how do they start that process? What does it look like? How long is it gonna take? You know, what's it gonna cost them, that sort of thing.

Doug Haugen (30:59.448)
Sure. We s typically what we'll do is we'll send out a seller's package that basically asks for a company overview, financials, a contract that's gonna be between us and them for a period of time that says we get paid if we do do find a buyer and the deal happens. and back to the I didn't really think it through on the the pitfalls for buyers and sellers.

what ends up happening is you know, we try to get the most up-to-date financials and everything clear and concise and a broad overview. and it just sometimes it seems like it's like pulling teeth. we'll have a buyer just say, hey, this their their their PLs aren't very clear. you're saying that that you're

Client is saying they're making half a million dollars, but I can only see 300,000. it's not clear as to how they're they're putting these packages together. I'm not understanding how. So so then Bob and I, what we end up we're we're trying to be a toothpick in a club sandwich. And so we're we're going back and forth being advocates in the intermediary for our clients from

questions that buyers will will ask. And and that's all driven off that first information package that we we request from our clients. So the best thing a seller can do is to have clear and concise financials, their ad backs, the personal ad backs, clear and concise, what will go away, what's going to be the cost to replace them, how much do they want?

to to stay on for a year or two, things like that. and once a buyer can finally wrap their arms around the business, what it what it is, conceptualize it, see the say, yes, you in fact are making a half a million dollars over and above all expenses. I can see that now. once we have that, then then it's the offer. We help negotiate with the

Doug Haugen (33:24.482)
the a counter offer. Most buyers are going to accept expect that we are once their offer is is put out that there's going to be a counter offer. Bob and I, that's we help with that. And so we play ping pong a few times on on the letter of intent. Once that's finalized, then the seller should expect that there's a due diligence phase where

You know, that's a legal due diligence, a financial due diligence process to verify, and then a buyer typically would be putting together the purchase agreement. And and so then of course the attorneys were not attorneys, so that's when the sellers are going to have their legal side then receive the purchase agreement to see if it matches the letter of intent.

And then once the the back and forth of the purchase agreement is done, you have an established date, estimated closing date that everybody works towards. And that's when the final due diligence pieces start to come together. the employment agreement for the agents, employment agreement for the seller is drafted. That's all looked at, and then all the other

minutia that comes along with the the legal side. then you have your closing date, everything leads up to that, and and then boom, here's your check, here's your down payment. the meeting with the is with the staff takes place and the introduction typically at that stage. And you know I'm I'm making it sound like it's it's simple but it's there's a lot of

Things that can happen, delays, but Bob and I are there for that.

Brian Jewell (35:25.33)
Yeah. Yeah. That's so helpful. What is the typical time horizon from, you know, the the day they fill out that packet to the day they're s sitting at a closing table?

Doug Haugen (35:33.51)
Yep. If if if my client is reasonable on their expectations and that's the biggest thing, and we have their information and we say go and they have they have something of value, then I don't know, Bob, what do you think? four to nine months?

Bob Sweeney (35:52.568)
five say five to seven months usually. Brian, you had asked about the the cost involved. We charge five hundred dollars on the front side and that's so we can give an opinion of value. Doug and I would pass around the financials and then based upon what we deem the value to be, we have a sliding scale on the percentage.

Doug Haugen (35:54.883)
Go.

Bob Sweeney (36:18.246)
of the purchase price that we would take. The most we'll take is 9%. And that goes all the way down to 3% for pretty large transactions. I would say that the typical tour or travel business that has a handful of employees, typically they'll sell, you know, 9% is 8%. But as they start getting more and more valuable, that number comes down.

And if they write out about a million dollars, we wind up at about six percent.

Brian Jewell (36:48.45)
Yeah, I see. I I assume it would be similar to you know, the experience of buying or selling a home where th those commissions get paid out as part of the closing process, right?

Bob Sweeney (36:57.838)
Yep. And if the seller's gonna we represent the sellers and if they're gonna get slow paid then we get slow paid too. We'll typically have a minimum at closing just to make sure that we haven't wasted our time. But yeah, we we'll ride along with the seller.

Brian Jewell (37:15.192)
Makes sense. Bob, what is the best way for people to find you, reach out to you, start some conversations?

Bob Sweeney (37:23.7)
you know, through our website, which is T Vlacq.com is short for travel acquisitions, you know, or the email, same way Bob or Doug, either one of us, at T VlaCQ.com. And we try to be you know, a good future resource for people who start to think about these things. And yeah, it's we can save people time.

And heartache. That's what we can do. heartache in that, you know, sometimes we'll approach someone and say, Well, I'm already talking with somebody. And then I'll immediately ask, Well, how long have you been in business for? And they'll say, you know, 32 years. And I say, Okay. So the first person that comes knocking on the door after 32 years, you're gonna try to railroad something in and make that work? Why would you limit yourself?

Well, I I I've never understood. So I'm real big about don't ever limit your buying pool. Some people say I only want to sell to someone in my consortium or it's absurd. It's like making the reference back to selling a house. That's the same thing as saying I only want to sell to somebody who lives in my town.

I mean, so don't ever limit your buying pool. That if I can give one thing and that's the advice. And from a buyer's perspective, the best advice I can give a buyer is if you do write an offer, put a time frame on it, expiration day. Cause otherwise it'll just elongate and just go the weeks will turn into months and the months will turn into years and yeah, like that. So yeah.

Brian Jewell (39:04.536)
Yeah.

Brian Jewell (39:08.216)
Yeah. Great insights there. Super valuable. guys, before I let you go, we have some questions we ask every guest, and these are just for fun. So it's no pressure. You can just kind of answer off the top of your head. Doug, I'll start with you on this first one. When you book travel, do you choose a window seat or an aisle seat?

Doug Haugen (39:24.684)
Window

Brian Jewell (39:25.762)
Yeah. You need that that pillar to lean on to sleep or you just like the view?

Doug Haugen (39:31.2)
I I'm looking down and clouds and it's just fun to see the earth go by.

Brian Jewell (39:37.998)
Yeah. that's beautiful. What about you, Bob?

Bob Sweeney (39:40.514)
I'm a ILC guy.

Brian Jewell (39:42.254)
Gotcha. Yeah, so you guys can just fit neatly into one side of the plane.

Cool. Bob, what is something in your carry on that you wouldn't travel without?

Bob Sweeney (39:53.824)
I guess I would have to say my deodorant.

Brian Jewell (40:07.406)
That's a good answer. For for clear and understandable reasons, right? Like everybody understands that. What about you, Doug?

Doug Haugen (40:18.194)
my Bose Noise Cancelling Headphones. It's it's been ever since I've had them, it's like the kids start to scream a couple of rows behind me. Put those babies on and it's and yeah, it's nice.

Brian Jewell (40:35.17)
Yeah. Yeah. That makes a lot of sense. Doug, if you had a free airline pass and a week with nothing else to do, where would you go?

Doug Haugen (40:43.33)
You know, probably 'cause I've not been, but probably Italy, something somewhere over in Europe.

Brian Jewell (40:50.208)
Yeah, that's beautiful. You gotta make that happen one of these days. Bob, what about you? Where would you go?

Bob Sweeney (40:55.295)
go to the Azores over in Portugal. No, but I wanna go.

Brian Jewell (40:58.061)
Wow. Have you been there?

Doug Haugen (41:01.594)
Yeah yeah.

Brian Jewell (41:02.186)
That's lovely. All right. Here's the final question. Bob, we'll start with you. What is something you have seen or done on the road that you wish you could go back and experience again with somebody you love?

Bob Sweeney (41:12.47)
Well, jumping in the cold ocean over in Scotland. Mm.

Brian Jewell (41:20.942)
Wow. How cold was it?

Bob Sweeney (41:22.616)
Pretty cool. It was one of those sauna deals where they had a little sauna, a portable sauna that, you know, come out and it's great. It was fun.

Doug Haugen (41:24.974)
Let's go.

Brian Jewell (41:33.368)
That's amazing. All right, Doug, you get the last word on that. What would you do with somebody you love?

Doug Haugen (41:39.122)
boy. You know, top of the World Trade Center used to be the the the thing and then Radio City Music Hall, Christmas Spectacular. but outside of that it would be the Grand Canyon.

Brian Jewell (41:55.47)
My goodness. Yeah. One of those places every American needs to try to see, as far as I'm concerned. So guys, this has been wonderful. Bob Sweeney, Doug Halgan, thanks so much for joining us.

Bob Sweeney (42:07.0)
Thanks.

Doug Haugen (42:07.478)
we hope we have been of help.

Brian Jewell (42:17.976)
I sure hope you enjoyed that conversation with Bob and Doug. I find these kinds of conversations really fascinating, and I think there is a lot of value in what they had to say. Whether you are at a point in your life where you are thinking about selling a company or buying a company, or whether maybe you just know that's something that someday you might be interested in doing. There are some things they had to say that I thought were interesting.

Especially important. I want to take a minute again and review them just to make sure you don't miss them. Now, when I asked how travel company owners know that it's time to sell, Doug said, one big way is that they find they're competing against everybody in a way they've never had to compete. When they've lost out in marketing, search engine optimization, or their clients are going somewhere else and they don't know why. So they see themselves falling behind.

And so in order to save what they've got, they want to find a buyer that could come in and that already has the marketing tools and the technology to help them stay alive and survive. You know, there can be a lot of stigma around aging. There can be some stigma around falling behind on technology. And, you know, while it's certainly possible for people to stay on top of technology as they age, it's frankly not the norm.

And I want you to hear me say that if you have found that you can no longer maintain your technological edge, if you no longer understand what is happening in the world of travel tech or travel marketing around you, number one, it's okay. It's really okay. You don't need to feel bad about it. It doesn't make you a bad person. It doesn't make you a failure. But as Doug is saying here, that might really be one of the key indicators that it's time to think.

About a life change and an ownership change for your travel business. Now, when I asked about how travel companies are valued, Bob explained a formula they use that takes a bunch of numbers into account. And then he said it uses a multiplier of that number to drive the purchase price. And the multiple expands as the level of profits goes higher.

Brian Jewell (44:37.526)
So someone who's showing $100,000 in earnings, they're probably going to get two and a half times that number. Someone who's showing a million dollars in net profit, they're going to get over $5 million. So the number expands from two to six. He went on to say that because there are no hard assets, a typical structure for one of these purchases would be I'm going to give you a small down payment, and then we're going to ride side by side for the next 24 months. And based upon what comes in the door, we'll have a formula put together.

That hopefully is satisfactory to both of us. So the risk has to be shared. The buyer does not want a hot potato. I think this is a really smart approach. There are two main points to make here. If you are a solopreneur, or maybe you have a very small staff, and the main purpose of your travel business is just to, you know, pay you enough to get by, well, there's certainly nothing wrong with that. In fact, there's a lot that's beautiful about.

Only doing as much business as you need to support yourself and your employees. But if you are thinking about making an exit or you see an exit in the next five to 10 years, it might be time to really start drilling down on profitability. Because profitability is the key factor in that formula that determines your multiplier and is going to make a big difference on the value you get on resale. I also love this structure of.

coming up with creative ways to sell the business, especially if you're selling to someone else who is involved in the business already. Chances are they don't have hundreds of thousands or millions of dollars in cash lying around. But if you can structure it in a way that they can make a meaningful payment up front and then you kind of work together to extract a fair amount of business for a set period of time after that, that is a really fair and equitable way to structure a transaction. I think it could be really, really successful.

For a lot of tour companies that I know. Finally, when I asked about what owners should do after they sell a company, Bob said the best scenario for the seller is why they got into the business. And in most cases, that's to create dreams, really over-the-top great vacations for people, and not to do all the administration work. He said the ideal scenario is the guy who got into it, built himself a nice company, and then

Brian Jewell (47:01.602)
has other hard workers around him. They sell the business and they only do whatever it is they want to do in the organization. He said, if someone wants to buy your business, you can name your schedule during that one year or the next five years, whatever it is. He said, it's a wonderful time to take your foot off the gas pedal and just kind of ease it back a little so they can carve out whatever it is that they want. Now again, I think this is so smart.

A lot of people I know that have sold businesses kind of go through a little bit of an existential dilemma afterwards where they don't know what they're supposed to do. They don't know what their life should be about. Sometimes it can be kind of a miserable feeling. I love Bob's advice here. Don't just sell it and walk away if you're afraid you're not going to know what to do next. Instead, kind of structure it in a way that you can still be involved, but only to the extent that it brings you joy. Get back to the parts of the business that you love most. And then

As you do that, it's likely that you will begin to see an exit and a life after business ownership that makes sense, that is exciting, and that is fulfilling for you in new ways. Great stuff there from Bob Sweeney and Doug Haugen. Well, we have talked a lot today about business transitions, about what an acquisition or purchase could look like, and kind of hinted around the idea that.

There are ways that you can and maybe should know when it's time to make that change for yourself. And this is a conversation I think is really relevant in our industry today because I know a lot of tour company founders and owners that are thinking those thoughts. And since sometimes it can be difficult to see your own situation clearly, I have some thoughts for you as well.

Those are gonna be the topic of today's hot minute.

Brian Jewell (49:03.138)
Yeah, that's right. The hot minute is the portion of the program where I take 60 seconds to give you my unfiltered thoughts on an issue that impacts tourism every day. And today we're going to ask the question is it time to transition out of your successful tour business? So let's put 60 seconds on the clock and get into it. There's a big problem in Washington. Our government is disproportionately run by aging baby boomers.

Who refuse to give up power. And unfortunately, in tourism, we're facing similar issues. Many tour companies are owned by boomers who worked really hard to build successful businesses. But I'm afraid too many of them don't know when to leave. And by holding on too long, they may be damaging their legacies. Businesses have to evolve, and their leadership must evolve too.

But too many tourism boomers are struggling to figure out the next steps because they have maintained too much control for too long, and now they don't have anyone in the pipeline to succeed them. So no matter how old you are, succession planning should be part of your strategy. If you don't figure that part of your business out now, the success you spent a lifetime building might slip through your fingers in the end.

Brian Jewell (50:29.794)
Well, that's the hot minute. That's how I see things anyway. Of course, as always, you are welcome to disagree with me, and we can still be friends. And hey, whether you agree or disagree, we would love to hear from you. You can send your thoughts, questions, or your favorite episode of the TV show Succession to podcast at grouptraveleader.com. I read every email that comes into that address. I really do love hearing from you.

And hey, you never know. Your ideas might just be the topic of the next hot minute. While you're in the mood to give us some feedback, would you do three things for me? Number one, would you go to your favorite podcast playing app and make sure you're subscribed to the show? Number two, while you're there, could you give us a rating? And number three, if you would leave us a review, that would be just amazing. I'm really thankful to everyone who has done that so far.

My thanks as well to Bob Sweeney and Doug Haugen for joining me today. On the next episode, I've got an inspiring conversation with Elizabeth Whalen of Middle Tennessee State University, who's going to tell us all about her vision for teaching the next generation of tourism professionals. You're not going to want to miss that one. Until then, though, remember this. At the end of the day, we are all on this trip together. So let's make it a good one. See you next time.

On Gather and Go.

Brian Jewell (52:02.478)
Gather and Go is hosted and executive produced by me, Brian Schule. Our publisher is Mac Lacey. Our creative team includes Dania Simmons, Ashley Ricks, and Rachel Crick. Our sales team is Talesa Reck and Ashley DiLucia. To advertise on the podcast, call Talesa at 859-253-0455. Gather and Go is a production of the Group Travel Leader. For more information on our podcast, magazines, and events, visit us online at GroupTravelleader.com.