Whether it’s a conference or meeting with a potential client, business travel is an investment in your company. As a savvy business person, you’ll want the most return for your money. Incorporating a few money-saving strategies on your business trips is a smart way to increase your bottom line. From the budget travel experts at Metropolitan Shuttle, learn how to save big on travel expenses with these expert tips.
Set a Travel Budget
As a business owner, overhead costs like business travel, are a primary concern. Once you’ve taken care of business operational expenses like rent, utilities, supplies, and payroll, you can see what’s left over to allocate to business travel. You must also prioritize your business-related trips. For instance, professional development conferences might be great for team building and sharpening employees’ skill sets, but they might not necessarily be a priority in lean financial times. In contrast, business travel for the purpose of closing deals that bring in revenue should be prioritized more highly.
From the employee’s perspective, they want to feel they are traveling in comfort with the basic needs of food, lodging, and transportation is taken care of at an appropriate level. The bottom line is important, but always take the balanced approach when it comes to budgeting for business travel. The location might also be a factor in the budget. For example, travel to Montgomery, Alabama might be less expensive than travel to San Francisco, California because these cities have very different costs of living. Instead of per diem budgeting, set the budget based on the geographic region.
The cost of meals can vary widely depending on the location and type of cuisine. Sometimes employees will be given a set amount of money per day allocated to meals. Other times, they simply need to bring back the receipts and provide an expense report at the end of the trip to get reimbursed. Either way, the frequent business traveler will not necessarily want to cut corners on meals, because traveling takes its toll on the body. Eating at inexpensive fast food restaurants may seem like a great deal, but encouraging your employees to eat better, healthier foods will keep them more productive and they’ll in all likelihood have fewer sick days to boot. A typical budget for meals per day might allocate $150 per day for meals, although it might range from as little as $20 to as much as $200 or more depending on if the meal is for the purposes of hosting a client. Sometimes the business meeting might entail wining and dining a client. If this is the case, make sure the employee understands the limits of the budget and stays within them.
Like the cost of meals, lodging can vary greatly in price depending on the type of lodging, the time of year, and the location. On average, a rate of $150-$200 is the expected range for a decent hotel that is not located in the most expensive cities like New York or Chicago. In those and other higher priced cities, you can expect elevated prices. No one wants to spend the night in the old fleabag hotel down by the river, so expect a big chunk of the budget to be allocated to lodging. Another way to save money but still have excellent travel accommodations is with Airbnb. Once this was a house sharing website for frugal-minded couch hoppers, but now they have many locations with sophisticated luxury apartments aimed at the corporate and business-minded travel. You can have all the comforts of home in a furnished apartment or studio with all the amenities that a business traveler might need, and often at a lower price than comparable hotels. It also gives you the opportunity to cook rather than spend money eating out every meal.
Of the three primary business travel expense categories, transportation will likely be the one with the greatest cost. When booking air travel, try to travel during the week, which will be priced lower than weekends and peak travel times. Also, business travelers can rack up points and miles for travel rewards and upgrades, which is another benefit of business travel. Also, keep in mind that there are several alternatives to renting a car or hailing a taxi at the airport. Lyft or Uber can be much less than a car rental or taxi and have expanded into many cities. Another way to save money would be to book a charter bus for travel, especially if a group of employees needs to go to the same location. Booking a charter bus can be a great way to have a large number of employees travel together and also reduces the cost per passenger for the trip.
According to Certify, “On the average trip, a company spends $949 per person.” Certify further detailed the cost of transportation, on average: $470 for airfare, $182 on a car, $74 on gas, $32 on parking, $49 on tolls, and $51 on taxis. All those expenses add up, so it is easy to see how hiring a charter bus could help consolidate and reduce some of those transportation costs. While business travel is an integral part of growing a company, make sure you prioritize business travel and put your focus on the trips that will bring the most return on investment.