Tours4 ltd: Daniel Smith
Daniel Smith hatched his plan for a sports tour business at university. He tells us it's now game on.
Not content to settle for a dull graduate job, Daniel Smith, 24, developed a business plan while still at university. He now runs Tours4 ltd, who organise sporting journeys across Europe. He tells us that it is game on. Name: Daniel Smith Age: 24 Business: Tours4 ltd Type of business: Sports tours and group travel operator Start date: 20/09/05
When did you first decide you wanted to start your own business? I met my business partner Sam Jennings in France while we were working as English assistants in schools near Bordeaux. I played football and Sam played rugby during that year and we helped organise tours to France for a few sides from the UK. We organised and managed the tours very well and the feedback from the teams was excellent, so we started looking into whether we could make a living from it. Determined to turn our ideas into reality we started to develop the business after graduating from university and Tours4 ltd started trading on September 20 2005.
Tell us about your business Tours4 ltd is a fully insured sports tour and group travel operator with offices in Manchester and Ramsgate, Kent. Tours4 currently has two divisions: ‘Tours4 Sport’ and ‘Tours4 Students’. Tours4 Sport is the sports tours division of Tours4 ltd, organising tours in the UK and abroad for sports teams of all budgets, ages and abilities. We arrange flights, coach travel, accommodation, fixtures or tournaments, insurance and days or nights out for football, rugby, cricket, hockey, netball and basketball teams. Our top destinations include Paris, Barcelona, Prague, Amsterdam and many others. Tours4 Students organises days or nights out in the UK and weekend breaks to major European cities for groups of university students. We organise coach travel and entry into attractions throughout the UK including paintball parks, comedy clubs, nightclubs, ice rinks, sports matches and many more. We can cater for 8 to 800 students.
What makes you think there’s a market for your business?We have done a lot of local and national market research among sports teams, which has demonstrated that there is a large regional market for sports tours in Kent and Manchester. We therefore have two regional markets to target as well as a national market.
Once you’d decided to start a business, what did you do first? As we had no business experience, Sam and I sought advice from anywhere we could. I ran the idea past a business advisor at Businesslink Kent and I have been working with them ever since.
What research did you do? We did a lot of market research with specific regard to prices and services for Tours4 Sport. We contacted players, managers and directors of sports teams at schools, clubs and universities throughout the UK to ask for their opinions and brief them about Tours4 and what we do.
What advice did you seek? We went to Businesslink Kent and joined the start-up programme, which gave us a good foundation for our business principles. Businesslink also gave us a £2000 grant for website development which enabled us to more than double our website budget. I joined the Federation of Small Business and sought advice on the legal side of operating a business through their help lines. Our accountant takes care of all financial matters and was very helpful in the early stages of the business.
What other help did you get? We went to every bank around and found HSBC to be the most knowledgeable and friendly towards two graduates with a fair amount of student debt and a good business idea.
Does the government need to provide more help to people trying to start a business? The current government is saddling students with so much debt that most of them are deterred from starting businesses when they leave University. Most graduates who have a business idea have to work to pay off their student debt and lose the passion for their idea, becoming settled on a graduate scheme or in a 9 to 5 career. While Business link courses have been useful, there really is no specific help for graduate entrepreneurs. Graduates desperately need an organisation that helps them plan and set up their businesses and offers financial advice for business and personal financial issues.
Talk us through the process of writing your business plan. The business plan for Tours4 was vital in demonstrating to tour operator insurance companies and banks that we were confident in our idea and that it would work. We approached all the major banks as most of them offer free business plan software or at least a guide to what we needed to show. We talked the figures through with our accountant and got a business advisor to check it before we took it to the banks and insurance companies. Because we took our time on the plan the banks and insurance companies not only liked the idea, they liked the business too.
How useful has your business plan been and do you think you’ll stick to it as your business begins to grow? There is only so much you can estimate before starting a business but we thought realistically about every business scenario that we would encounter so there haven’t been any nasty surprises ….yet! The Tours4 business plan contains expansion plans and is a general guide for our business principles and financial targets. We have stuck to it so far but a good business plan should be able to adapt to every new situation.
How much did it cost to start the business? £30,000
How did you fund this? Personal investment from our families, a web development grant from Businesslink Kent, investment from an international travel partner and an overdraft with HSBC to be used in emergencies.
Similarly, how are you funding your running costs until the business takes off? We have started another company as an offshoot to Tours4, Dynamic Teamwear ltd, which is a simple sports clothing supplier with quick turnarounds and great prices that we have negotiated with manufacturers. It works very well alongside the sports tours we organise and has allowed us to concentrate on getting the financial foundations right for Tours4. We plan to launch Dynamic Teamwear as a separate company in December with another director, Nick Higgins.
Have you made any provisions for business not being as prosperous as expected? Please explain them. We have to write off around 40% of the profits from Tours4 to the taxman but its not like we are selling toasters for £10. We organise tours for groups of sports men and women who pay from £50 to £1000 each for a sports tour. A typical tour consists of 25 people so there is a lot of planning and hard work that goes into each tour we create but our turnover for our first year should be pretty high.
Are you working from home or from premises? Both Sam and I work from fully equipped home offices in Kent and Manchester, which keeps our overheads low so we can pass these savings onto our customers. We can also offer personal visits to sports teams in our regions. If the business keeps developing at this rate we will be looking to move to bigger offices within 6 months but the criteria has to be right for us maintaining low overheads.
How many hours are you working at the moment? If I am on a tour I am on duty 24 hours a day but in the office I work about 12-15 hours a day depending on whether I’m doing evening or weekend promotions at a local sports matches.
How are you managing your day and what steps have you taking to ensure you’re able to get everything done without working around the clock? When you work from home you have to be very disciplined so I get up religiously at 8am however I’m feeling. The work is so varied from organising tours to selling them that it keeps me interested as no two days are ever the same.
What about staff, is it just you? At the moment Sam and I are the only full time employees but we have several people who work on commission and we will look at employing people as we expand.
Is the amount of red tape that comes with taking on an employee something that concerns you? Potentially yes, although we will be seeking advice from Businesslink and our accountant.
What marketing and advertising have you done so far? We have a bi-annual article in The Times tracking our progress, looking at how difficult it is for graduates to set up businesses. We have mainly relied on PR in the local and regional papers and at the moment we have plenty of tours to keep us going by word of mouth alone. We have looked into advertising but for now we want to create the perfect sports tour for all of our customers and let the word of mouth spread – that is the best form of promotion.
Where do you hope to be in 12 months time? Most importantly I still want to enjoy what I do but I am realistic enough to see the potential in the idea and I have the will to develop it. In 12 months time I think Tours4 will have several new divisions including Tours4 Stags and Tours4 Hens and Tours4 Sport will have contracts for several professional sports clubs and a growing list of clubs, schools and universities who tour with us year after year.
What are the main obstacles to growth? As a tour operator we need to comply with all travel regulations and insurance laws and this can be expensive. At the moment we more than double the insurance standard and trade as retail agents for ATOL holders which allows us to sell flights. When the time comes we will need our own ATOL license and other bonded security, which will need more investment.
How do you plan to overcome these? We will possibly look into business angels or another form of outside investment for bonding requirements but at the moment we comply with all travel regulations using a great value insurance scheme.
Tell us about your websites. We have three main websites at the moment that have been paid for using the grant that we were awarded by Businesslink: www.Tours4.com www.Tours4Sport.com and www.Tours4Sport.com. They are all user-friendly and look professional. Most importantly we have a complete content management system, which means we can update the site whenever we want. I knew exactly what I wanted the sites to look like from the outset and we managed to cram it all into our budget. Planning a website is vital to save time and money and the website planning packs from Businesslink Kent helped us a lot.
What are your main ambitions, to make a lot of money or enjoy what you do? The main reason for starting Tours4 was to enable us to do something we enjoy. Our biggest passions are sports and travelling and we don’t want to lose sight of that. I’ve seen too many of my friends doing jobs they really don’t like so I desperately wanted avoid that situation. Even in our first month we have seen that the company is going to be successful which is great but we need to make sure that we carry on enjoying what we do. That is what makes Tours4 so dynamic.
What have you found difficult about starting up and what do you wish you’d done differently? The most difficult part of setting up Tours4 has been understanding and complying with travel industry and insurance laws. Accountancy could have been another issue but we chose an accountant who deals with everything from PAYE to VAT, all we have to do is record the figures once a month. We planned it so meticulously that we knew almost every eventuality that would arise and although this took a lot of time I wouldn’t change it.
What skills and personal characteristics do you need to start your own business? As long as your idea is sound, all you need is self-belief and the ability to convey that to everyone you meet. You can learn everything else as you go along.
So what advice would you give to anyone thinking of starting a business? Get as much advice as possible from as many sources as you can. Take the negatives and turn them into positives. Take time to plan your business and get to grips with every minor detail. Don’t just work hard, work smart! Go for it, you never know until you try.