When you’re trying to travel for work, you still have to stick to a travel budget. At one time business travel meant 5-star hotels, first class flights and enjoying the finest dining. It was intended to be for men and women wearing suits and spending the trip trying to impress clients.
Some companies still work this way, but others are looking at business travel as a means to get from one place to the other on a budget. When you own a company and don’t want business travel to be a major expense for your company, how do you encourage this with your employees? Here is a look at some tips for traveling for business on a budget.
Establishing your Budget
One of the perks of monitoring your travel expenses is that you can treat them like an investment. You’ll learn over time how much your company can afford to spend on travel and what you can spare in the short term. You’ll find out if the return on investment justifies the expense. Come up with a travel budget after you handle your core business expenses.
If times get a little tight, skip the corporate travel fund so you can make rent and payroll. Regardless of whether it comes from revenue or debt, your rent and payroll are a priority and requirement which can’t be avoided.
Design a Travel Policy
You’ll need travel policies in place to determine what can be approved for travel expenses. Make sure you have a section for per diem meals and another for the approval process. Perhaps a junior employee will need to get approval from their manager. The travel policy should include conditions on what you reasonably expect to add to the company from the trip.
If an employee flies to another state to gain a prospective buyer, then it must be a reasonable trip with long-term profit opportunity that far outweighs the cost of a hotel, plane ticket and meals. If your employee wants to fly to another state for a seminar on improving in the business world, you may want to evaluate the importance of the trip. Many times, you can find similar seminars that are local or online. You may be able to nearly eliminate the travel expense.
Analyze the Trips for Future Reference
Take a look at the data from the costs of these trips that were approved compared to the value that each trip brought to the company. If you find it worthwhile to send an employee off monthly to meet with clients in another area due to all of the customers that you’ve added from that area, then it’s definitely something to keep doing in the future.
If travels to different conferences or areas didn’t pan out, shorten the trip next time or skip it altogether. Tracking travel and controlling these costs is important to not waste money, but also keep in mind that these trips could be adding value to your company in the long-term.
Don’t force your employees to live in poverty during business trips. Keep them fed, comfortable and offer convenient travel options to make them work their best during the trip. You don’t have to send them in first-class, but avoid red-eye flights and out-of-date motel stays with limited meal funds. Air travel can be negotiated for small companies that are looking to establish a provider.
Consider offering one upgrade to your employees for a flight in case it is necessary. This will help you retain a lower budget while still taking care of your employees. The hotel location is most important for your employees going to an unfamiliar area, and many providers will help you get business traveler breakfast, parking and Wi-Fi included. Sometimes you will need to put more money into the meal fund so that your employees can wine and dine your potential clients, so make sure to include this in your budget.
Use these tips to make your company’s travel budget affordable and productive as a long-term investment.