Where to Start
with Travel Budgeting
The initial tsunami of chaos brought by the COVID-19 pandemic is finally beginning to recede, and as the world begins to adapt to the new circumstances, many businesses will be facing the complex task of forecasting and budgeting for 2021/22. This could be more challenging for SMEs, which have been under a lot of pressure following government announcements and a revenue-disrupting year.
One element of budgeting for SMEs that might seem a little tricky right now to get right is that of business travel. With no precedent to base a rough template on, and with international borders still liable to open and shut at a moment’s notice, calculating what to set aside can feel akin to figuring out the Lottery numbers for next week’s draw.
But we’re here to help!
Fortunately, there are things you can do to make travel budgeting for next year easier. We’ll get to those shortly, but first let’s briefly touch on the state of play as things stand.
What’s the current state of play?
Our recent ‘State of the Market’ survey has provided valuable insight into how businesses generally are viewing - or forecasting - travel spends compared to pre-pandemic volumes.
Encouragingly, almost a third of respondents predicted their spends to either increase (6%) or stay the same (24%), which reaffirms the importance that travel plays in developing opportunities overseas. Perhaps unsurprisingly, almost two fifths (39%) said they were simply unsure of what they’d spend next year, and 31% claimed their spends will likely decrease.
Clearly, any business that relies on travel as a core vehicle of revenue growth needs to balance that strategy with successfully navigating the current volatility of the economic climate. In short, middle ground is required. For businesses that want to continue to reap the rewards that only face-to-face contact can produce, it will be crucial to have an advantage over their competitors by being able to hit the ground running at the first opportunity, and the following tips will go a long way to achieving this.
Six simple steps to get your travel budget back on track
- Review previous travel spends
First things first: give yourself as clear and as detailed a picture as possible of your travel spend in previous years, and portion out into relevant categories (e.g. what was for meetings, what was for conferences, what was for crisis management etc.). Once you’ve done this, you’ll be able to make far more informed decisions about what’s essential going forward.
A travel management company (TMC) like FCBT will have reporting functionality already in place for this kind of thing.
- Get your travel policy sorted
If you don’t yet have a Travel Policy, creating one needs to be a priority, and if you do have one, reviewing it needs to be a priority. Having clear guidelines for your travelling employees has never been more important, to protect both them and your business. The best policies are flexible but firm, not attempting to lock employees into rigid rules but providing clear boundaries within which they can operate when it comes to things like spend, safety and convenience.
As part and parcel of its service, FCBT can help you create a Travel Policy customised to your specific needs.
- Carefully plan ahead
Looking carefully at the year ahead and planning accordingly is absolutely crucial to getting your travel budget back on track. Set aside a day to really analyse what’s essential and what’s non-essential in terms of potential business travel. Be ruthless and savvy.
Perhaps there’s a conference certain staff attend every year - is this still providing a genuine ROI to your business, or is it simply done out of habit? Are there any left-field networking opportunities where just one conversation with the right person could transform the fortunes of your business? There’s never been a better time to refresh strategy in this regard.
- Get costs under control
As a follow-on to reviewing previous travel spend, it’s imperative to get your costs under control. Every penny counts. Again, having a TMC to assist with this is invaluable. Your dedicated business travel expert at FCBT will instantly be able to advise where costs can be cut at no interference to the quality of the trip, and can also give you access to exclusive airfares and hotel rates.
- Be prepared to be flexible
If the last six months have taught us anything, it’s the importance of having a Plan B. And a Plan C, D and E for that matter. Have a contingency budget ready to be used at a moment’s notice for unexpected opportunities.
- Don’t stress!
Okay, easier said than done, but if you’ve made it this far, you’re through the hardest bit. When it comes to budgeting, be as proactive as you are reactive, and use your TMC for instant expert guidance and advice for when the landscape starts to shift one way or the other.
Need a hand making sure your business is on track to travel again?
We've put together a simple assessment to gauge the health of your company's business travel programme. So whether you're currently travelling or preparing to hit the road again, book a 20 minute health check with one of our experts to make sure everything is on track for success and safety!