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This type of business differs from a traditional tour guide service in that the focus is not on the popular tourist destinations. Instead, it focuses more on unique and special experiences. Both local residents and tourists enjoy these types of tours/parties.
This business provides interesting tours that have a niche focus, about which the tour guide has specialized knowledge and/or skills.
Some popular themes include:
- Food and drink related tours
- Wine tours
- Chocolate tours
- Liquor tours
- Nightclub tours
- Ghost tours (tours of old "haunted” houses)
- Mystery dinner parties
- Street Art tours
- Wildlife tours
- Adventure tours
- Exercise tours
- Eco tours
- Chuck wagon/Horse trail tours
- Special access tours (backstage, restricted areas)
For locals these tours can be great for a fun adventure, a night out, a party to remember, a unique date. Visitors from other areas are increasingly looking for immersive and compelling experiences when they visit a new place.
People like to do things that feel more authentic and consistent with what locals do versus just taking a sightseeing tour to see the major attractions.
“Experiential travel” is a very popular trend right now. Traditional travel agencies along with new and upcoming travel agents and travel services are helping tourists get connected with nature with adventure tours, eco tours, and wildlife tours. These tours are designed to provide patrons with a rich experience that combines learning and travel with new sights, sounds, flavors, and experiences.
These can be very active experiences such as hiking, climbing, bungee-jumping, flying down a wire cable over the tree canopy, whitewater rafting and so much more. Many prefer such active experiences when compared to the traditional bus tours where tour guides describe things as the bus passes them by.
Who is this business right for?
This business is for people who are passionate about traveling, enjoy being outdoors, have a flexible schedule, and who are enthusiastic to share their love for a place with locals and tourists alike.
What happens during a typical day at a boutique tour business?
One of the main things you will need to do each day is to check the success of your marketing efforts. Whether you operate as a solo tour guide or as a manager of multiple tours run by a team of guides, it is your job as the business owner to make sure that enough tour bookings are happening for your business to be profitable.
Each day you will book new clients and contact those who already made reservations for a tour that day to make sure they remember the appointment time to meet up for the tour.
You will always be looking for exciting information or things you can do that make your tours unique.
If you are a tour guide yourself, you will need to prepare for the tour(s) for that day. Make sure any special needs of your clients can be accommodated, and that your tours run on time.
What is the target market?
Some boutique tours have age restrictions, such as wine tours, for example. Others that are very physically active may have weight, height, and health restrictions. Depending on your niche, however, you might see customers coming from all types of backgrounds.
How does a boutique tour business make money?
The tours are offered on a cost per person basis. You may offer discounts for certain groups or ages, like seniors or children.
What is the growth potential for a boutique tour business?
Growth in this business comes from booking more clients and serving more areas. With travel and tourism being one of the world’s largest industries, there is an ever-increasing demand for high-quality entertainment options, especially ones that offer a unique experience.
What are some skills and experiences that will help you build a successful boutique tour business?
It will be terrific if you are really good at making sure people on the tours are safe, do not get injured, and have a really good time. Having in-depth knowledge about the niche that your tour focuses on, is critical. Presenting what you know to those on the tour in an enthusiastic way will help increase your company’s popularity.
This is a “people” business so you will need to be gregarious, caring, and compassionate. You will also need to be patient with people who are in a bad mood no matter what you try to do to make them feel better and to have a good time. A few people may be unhappy for all kinds of reasons. They might be feeling ill or just had a fight with their significant other right before taking the tour with them. You will need to be able to manage this negative energy so that the others on the tour can still enjoy it.
What are the costs involved in opening a boutique tour business?
This business can be started very modestly. You do have to take the time to learn as much as possible about your tour niche. You will need to have everything necessary for the tour, which might include lots of equipment for an adventure tour and means of transporting your clients around as required.
The most common form of transportation used for a boutique tour business is a passenger van that seats up to 8 people. These cost about $50,000 each and can be leased on a monthly basis for about $500 per month. If your tours only happen occasionally, these vans can be rented on a daily basis with insurance for about $100 per day.
The other cost to get started is any marketing expenses you need to use in order to attract clients. You made need to create and then advertise a website. You may also want to print up colorful flyers and distribute them.
One company we know was started by a person who already had excellent knowledge of the local “haunted” houses. She printed up a few flyers for less than $50 and then visited the weekly meetings of the local book clubs that like to read mystery books or those who enjoyed horror stories. She immediately booked her first tour of only four people. They really enjoyed her knowledge and enthusiasm and told their friends. Her company has been successful ever since. She formed an LLC and hired more guides based on the increased bookings for her tours. She started modestly and yet made a terrific success.
Equipment for adventure tours may be a very big expense. If for example, you will offer bungee-jumping or wire cable rides then the equipment will cost many thousands of dollars.
Some boutique tour companies start out by marketing these services provided by others and earn a commission for each person they book for the tour.
The range of startup expenses in this business is from a few hundred dollars to many tens of thousands. This depends on the type of tour you are offering.
What are the steps to start a boutique tour business?
Once you're ready to start your boutique tour business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your boutique tour business is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your boutique tour business keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
How to promote & market a boutique tour business
Flyers are a terrific way to attract visitors. There are often display cases in hotels where you can place your flyers for a fee. Distributing flyers to groups, stores, or other businesses that relate to the tour you offer can also be an effective strategy for promoting your business. For example, if you have an exercise tour that takes clients through the various exercise stations of city parks, you can place flyers at local health clubs and health food stores and offer to pay a commission for each booking they generate.
Online marketing of your services and website can be effective also. It is possible to offer your tours through travel agencies and pay them a commission for making a booking.
Billboards and bus stop advertisements are an effective way to advertise to the traffic that passes by on a busy street. Larger professional companies make use of television advertisements and advertisements on in-house hotel video systems.
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How to keep customers coming back
For some types of tours you will have repeat business. In most cases you will rely heavily on attracting new customers. For those tours that can be enjoyed over and over again, it is a good idea to offer discounts for future bookings, specials and loyalty reward programs for valued customers, and even subscriptions if possible. For example, an established adventure tour with a physical location they control may offer a season pass that allows a customer to re-visit as many times as they like.
How and when to build a team
Tour guides are needed based on the number of bookings that are made. These tours are typically reserved in advance and prepaid by the customers. There is usually a minimum amount of people needed to sign up for a tour before it can be conducted for a profit.
Having a flexible staff that is available to cover the level of bookings made is a great way to build up a team. These tour guides are paid for each tour they conduct, so they only get paid if there are sufficient bookings to support another tour.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a boutique tour business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office.
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
It is advisable to provide clients with informed consent agreements to decrease legal liability and encourage transparency. Here is an example of a liability waiver, sometimes called an “informed consent agreement”.
How much can you charge customers?
Not including the costs to get there or any needed hotel accommodations (which are sometimes included in these boutique tour packages), here are some typical prices charged for some types of these tours:
- Haunted House Tour - $25 per person
- Wine Tasting, Chocolate, or Liquor Tour - $25 to $125 per person (includes free samples and possibly a meal)
- Bungee-jumping, Cable Wire Adventure Tour - $50+ per person
- Nightclub Tour - $75 per person (includes VIP entrance and some free drinks)
- Mystery Dinner Party or Chuck Wagon Horse Trail Tour with food - $100 per person
- Special Access Tour - $150 to $500 per person (backstage pass to a major concert)
What are the ongoing expenses for a boutique tour business?
The main expenses are the marketing costs, the tour guides, and the transportation.
Basic marketing investment needs to be at least $200 per month for the most modest operation simply using flyers. Tour guides make about $30 per hour. Vans can be leased for $500 per month or $100 per day. Insurance for the business can vary wildly depending on the potential risks to the customers.
A haunted house tour needs insurance for the transportation van, which may be around $200 per month or $30 per day if using a rented van. A bungee-jumping, cable wire adventure tour will need insurance that costs many thousands of dollars per month that is charged based on the number of expected customers.
How much profit can a boutique tour business make?
Worldwide, the experiential travel market is evaluated at nearly one trillion dollars. With an exciting mix of tour options and a charismatic and knowledgeable team of guides, your business could potentially bring in as much profit as you want.
How can you make your business more profitable?
One idea is to look for the possibility of any items that can be sold to the tour clients and get a commission or make a profit for the sales. For example, eco-tours may offer photos of the clients while they are experiencing a special, perhaps scary part of the tour. Wine tours can earn extra money from the bottles of wine sold to the tour participants.
Lowering the costs of transportation by leasing or buying a van rather that renting a van on a daily basis can save lots of money. Encouraging others to help create bookings by paying them commissions is another way to increase your business and make more money.