MORE - what running a regional tourism business is really like
Due to the feedback I had on the last article, here’s MORE because you asked for it and loved it!
For naturals and extroverts, this is true, they make it look like fun. And some people do make it look easy - perhaps it is. Good for them. But you don’t know what you don’t know when you start anything new. Here's some things to keep in mind, that seem to surprise people when they start on the small business path.
Change is physically uncomfortable, even painful
Starting and running a small business can be exhausting, terrifying and exciting. Your head won’t shut down, and your body might physically ache as you put in time to meetings, do the painting and renovating, make the calls, navigate ambiguity, battle with website designers to get the site live so you can win bookings and start to make money. You have a long to-do list of things that you are paying for, and you haven’t made a cent yet.
When moving from a hobby to a business it's important to be patient and work through challenges. Realistically, it takes 12- 24 months to start getting bookings and see a pattern emerge through holidays and the seasons as you grow.
I'm gonna make a motza, maaaaaate
I really hope you do! But the statistics show otherwise. Tourism businesses are mostly small operations earning less that $50,000 a year. The number of micro businesses in Australia grew by 10% from 1.4 million in June 2021 to 1.5 million in June 2022. That’s 100,000 new SMEs in one year, and this was when COVID was at its peak. This means there's so much more competition and choice for consumers that every business would be making less across the board, in what is already a very marginal sector.
At June 2021 over half of all tourism businesses in Australia (53%) had annual revenues of less than $200,000. Only 10% had revenues more than $2 million a year. 47% of regional businesses had revenues of less than $200,000 a year. And I know from exerience woking with micro SMEs that most of them in tourism are doing well to turn over $80 - 100,000 a year and pay a full time salary.
Small business owners’ pockets are not deep and many tourism operators who are marginal are at a high risk of exiting the industry. Small business owners are the canary down the mine when it comes to testing the impacts of inflation as small businesses are the first to fold with rising costs and slowing consumer spending.
So if you want to start a successful regional tourism business, it can help to keep these things in mind. I write this as I hope it galvanises you to focus early rather than act 'organically' and have purpose when you start so that you don't spend time investing in things that might make YOU feel good, but don't really matter as far as having a sustainable regional business goes.
Contact us, call Susan Lee