Wanting to sell a small travel business? Here are 10 basic need-to-knows
- Chris Thompson
- Mar 24
- 6 min read
It’s not unusual for owners and directors to want quick opportunities to sell their small travel business. But, as Firebird’s Chris Thompson reveals in this blog, there are essential tips every one of them ought to know before embarking on the process.
As part of my role as a Firebird director I am frequently approached by small travel businesses looking to sell – and by small, I mean those with a turnover of under/around £1.5m and profitability under £200k. Many of these are great firms with tight niches and decent margins, but the reality is that most aren’t quite sale-ready. At the same time, many have significant misconceptions around the selling process, including when external support is appropriate.
Here’s the guidance I keep coming back to.
1. Know what you want.
Are you looking for a clean exit, or do you want to stay involved? Is this about obtaining a lump sum, a new opportunity, retirement, or simply moving on?
And do you have a selling price in mind? If so, test it: try to establish what other similar businesses have sold for; look at the figure you have as a multiple of profit (if it’s a big multiple you’re almost certainly kidding yourself); you could even buy one of us at Firebird a coffee and sense test it.
One of the biggest misconceptions we see at Firebird is around value. It may help to anchor your expectations with the knowledge that many small travel businesses sell for something like 3 to 4X sustained earnings.
For some, that comes as a disappointment. For others - especially those who want a quick exit - that’s entirely fine. Still others may prefer to work towards more than 3 to 4X - and, in those cases, it’s worth considering the opportunity to collaborate with specialist advisers like Firebird to grow the business - not only to increase profitability, but also to increase your multiple by scaling up.
Whatever your thoughts and intentions, your own clarity matters – and will guide what happens next.
2. Preparation takes time.
Whatever route you choose, if and when you decide to embark on the selling process, it’s highly unlikely you’ll achieve a good price without at least 12 to 18 months of focused prep work – ideally longer. That will include in-depth reviews of:
Systems.
Processes.
Positioning.
Governance.
People.
Last-minute tidying in any of these areas won’t cut it: it is very unlikely that you will have a saleable asset without serious preparation.
That’s not to say that every business up for sale needs to be a highly polished gem, but you need to have your “house in order” on a basic level.
3. Get your data sorted early.
This is a point that the Firebird team frequently repeats. Even at a small scale, any prospective buyer will expect clear data from you. Start building a data room now, and get into the habit of creating clean month-end management accounts as well as cash-flow projections.
Drill down on your KPIs and OKRs. Understand how your revenue and margin actually behave. Know what is really making – and costing – you money.
If ever you’re in doubt about next steps, know that strengthening your data points will always help, with questions around repeat bookings, margin by product/destination, and how customers are acquired (and at what cost) tending to come up quickly in all buyer conversations.
4. Understand what else motivates different buyers.
Thinking about what buyers may want will help you to position your business in the right way. Consider, are they interested in:
Your contracts?
Your client base?
Your brand?
Your cash flow?
Your processes?
Any niche or unique know-how you’ve accumulated?
BUT if the business is not making decent money (specifically once you have paid yourself - the profit you make should exclude any dividends) you are always going to be facing an uphill battle.
5. Be visible in your sector.
You don’t need to walk around with a sandwich board saying “for sale”, but you do need people to know you exist. Get out and about, and focus on building relationships. With the right people at the right moment, you can discreetly sow the seed that you’re open to conversations around future plans.
6. You may already know your buyer.
In niche travel, your most credible buyers tend to be close to home. They may be:
A competitor.
A fellow member of your trade association.
A supplier or partner.
A person – or group of people – in your own team (see point 8 below).
Or even a client.
Casting the net wider than this will often add noise but not value. It’s also time-consuming and can be an expensive process.
7. A succession plan is not optional.
When operations, relationships and/or decision-making run through the business’s founder – whether or not it’s you – this puts a hard cap on the business’s wider saleability and value. (You may make less than the above 3 to 4X figure if the founder is central to everything.)
The reality is that buyers want continuity, not dependency. (For a Firebird introduction to succession planning, click here.) There can be exceptions - for example a buyer already in your niche who simply wants your brand or customer base - but your options will be constrained.
8. An MBO might be your best fit.
Stewart Lambert - Firebird’s co-founder and corporate finance expert - has written a number of articles about M&A in the travel sector in recent years, noting the option of management buyouts (MBOs) for some businesses as an alternative to “traditional” sales.
Following on from my point about succession planning, consider: do you have someone in place now who could take over running your business? And if you do, is it possible they could become your buyer? MBOs often don’t happen because people think that their general manager - for example - doesn’t have the money, but there are solutions for this. (Read our MBO dos and don’ts article for more information.)
9. A broker isn’t always the right answer.
As you’ve probably guessed by now, you’re unlikely to get a great sale through brokers if you approach them before your business is almost ready to go on the market.
In addition, for smaller businesses that are ready to sell, the maths of appointing a broker rarely work. Why? Because while the workload for a broker will be the same for them as it is with a much larger deal, the final sale value won’t be. In this context, fees for small businesses end up looking disproportionately large. As a result, many brokers will focus on bigger transactions.
That said, it is nearly always worth having a conversation with an adviser, or advisers, with experience of supporting smaller businesses through transactions. Drop a line to one of the Firebird team if you’d like an initial discussion, whatever stage of the process you’re currently in.
10. Know that not all businesses are built to sell.
Last but by no means least: I want to recognise that some travel businesses are fantastic lifestyle businesses but not necessarily built to sell. There is nothing wrong with that, but recognising the distinction early may help you.
Selling is a lot of time and effort. Getting your business to a point where it can stay running and create an income may be easier. Sometimes simply closing the doors is a valid option.
What to do next.
If you’re thinking about selling in the next couple of years, my advice would be to start here:
Build clean monthly management accounts.
Document key processes.
Identify potential successors in the team.
Understand your true profit after paying yourself properly.
Map out who realistic buyers might be.
Consider opportunities to create growth and increase value.
Have a chat with specialist advisers like Firebird, who understand the ins and outs of small-business transactions.
To sum up, small businesses can sell well, but only with realistic expectations, proper preparation and a clear understanding of where the value sits.
If you want to maximise the outcomes for you, start working on all of the above long before you open up the conversation. Until then, we’re always happy to have a short conversation for anyone wanting a sounding board on their plans. Get in touch to find out if we can help.
Chris Thompson is a Director of the Firebird Partnership, with over 20 years’ experience of leading and growing businesses in the travel and tech sectors. His focus is on creating strategy, building teams, and devising processes that are both efficient and value-building.
Learn all about Firebird at www.firebirdpartnership.com
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